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Agenda 08-13-13
BOYNTON BEACH POLICE OFFICERS’ PENSION FUND QUARTERLY BOARD MEETING Tuesday, August 13, 2013 @ 9:30 AM Renaissance Commons Executive Suites 1500 Gateway Blvd., Suite #220 Boynton Beach, FL 33426 AGENDA I.CALL TO ORDER – Toby Athol, Chair II. AGENDA APPROVAL III. APPROVAL OF MINUTES – Meeting 4-14-2013 Special Quarterly Meeting 5-14-2013 IV. FINANCIAL REPORTS: A) Quarterly Investment Review – June 30, 2013 1) Russell Investment Group – Mary Jean (MJ) Candioto, CFA a) Economic & Financial Markets Review & Outlook b) Investment Review c) Impact of implementing Multi-Asset Core Fund (performance v. legacy portfolio) th d) Russell Conference in NYC Upcoming Oct 16. e) Authorized Signers – To update signers- f) Amendment 12 – Fee Exhibit – for signature and review to include the Russell LC Defensive Equity Fund. 2.) Burgess Chambers & Associates (BCA) – Burgess Chambers, President Frank Wan, Head of Research 1) Fund Performance review – V. CORRESPONDENCE: VI. OLD BUSINESS: 1) Disability app pending on Robert Epstein – Outline of documents 8-6-2013 via Email by Bonni Jensen AND Paul Kelley of Birchler, Kelley, Oliver & Longo, PLLC Hearing presentation by 2) Discussion on law changes regarding “snap shots” of vac/sic accruals. VII. NEW BUSINESS: A. Invoices for review and approval: 1.Russell Investment Gp. – Quarter End 6-30-2013 - $126,061 2.Russell Payment Services – Quarter End 6-30-2013 - $1,015.34 1 3.Perry & Jensen – Service May, Jun & Jul 2013 - $2,382.95 t 4.Burgess Chambers & Assoc – 2nd Qtr 2013 fee - $5,000 5.Gabriel, Roeder, Smith & Co- Service June 2013 - $900.00 B) Application for Pension Disability Benefits - 1) Officer Gregory B. Kenny – Injury date 10-22-2011 – Disability app with medical documentation. D) Attorney Report - Bonni Jensen 1) Pension Disclosure Amendments to Chapter 112 (SB534) June 2013 2) Annual Report 2012 - additional info / Annual Report approved 8-1-2013 Per Jeanine Bittinger, Plan auditor, Davidson, Jamieson & Cristini, PL 3) Rehired Officer with existing Def Vested Benefit 4) Definition of Compensation/ Collective Bargaining Agreement status. 5) Renewal of Consumer’s Certificate of Exemption – Expires 9-30-2013 NCPERS Outline - Annual Conference May 2013 by Jason Llopis – E. Review of highlighted items. F. Web based accounting for DROP accounts - Discussion 1) Alerus Financial Group (AFG) – Information pieces for review – (Boynton Fire Pension DROP Administrators – GRS/Tegrit/Alerus) VIII. PENSION ADMINISTRATOR’S REPORT 1.Benefits as of August 1, 2013. 2.2013 Board Members 3.Alive & Well statements – 25 outstanding – Follow-up sent August 2013 IX. COMMENTS: X. ADJOURNMENT: Next Regular Meeting Date – Tuesday, November 12, 2013 @ 9:30 a.m. – Renaissance Commons If you cannot attend, please call Barbara @ 561-739-7972 NOTICE PO’PB IF A PERSON DECIDES TO APPEAL ANY DECISION MADE BY THE OLICE FFICERS ENSION OARD WITH RESPECT TO ANY MATTER ,/,,/ CONSIDERED AT THIS MEETING HESHE WILL NEED A RECORD OF THE PROCEEDINGS AND FOR SUCH PURPOSE HESHE MAY NEED TO , ENSURE THAT A VERBATIM RECORD OF THE PROCEEDING IS MADE WHICH RECORD INCLUDES THE TESTIMONY AND EVIDENCE UPON .(..286.0105) WHICH THE APPEAL IS TO BE BASED FS THE CITY SHALL FURNISH APPROPRIATE AUXILIARY AIDS AND SERVICES WHERE NECESSARY TO AFFORD AN INDIVIDUAL WITH A ,, DISABILITY AN EQUAL OPPORTUNITY TO PARTICIPATE IN AND ENJOY THE BENEFITS OF A SERVICE PROGRAM OR ACTIVITY CONDUCTED .CC’,(561)742-6060- BY THE CITY PLEASE CONTACT ITY LERKS OFFICE AT LEAST TWENTYFOUR HOURS PRIOR TO THE PROGRAM OR . ACTIVITY IN ORDER FOR THE CITY TO REASONABLY ACCOMMODATE YOUR REQUEST S:\CC\WP\JANET\POLICE PENSION FUND.doc 2 • MINUTES OF THE BOYNTON BEACH POLICE OFFICERS' PENSION FUND SPECIAL BOARD MEETING HELD ON MONDAY, APRIL 14, 2013, AT 1:00 PM RENAISSANCE EXECUTIVE SUITES, SUITE 220, CONFERENCE ROOM 1 1500 GATEWAY BOULEVARD, BOYNTON BEACH, FLORIDA PRESENT: Toby Athol, Secretary Bonni Jensen, Board Counsel Scott Caudell Barbara LaDue, Pension Administrator Jason Llopis ABSENT: Frank Ranzie I. CALL TO ORDER — Secretary — Toby Athol — Acting Chair Toby Athol, Chaired the meeting which was called to order at 1:05 p.m. II. AGENDA APPROVAL There were no changes to the agenda, and it was approved by consensus. III. APPROVAL OF MINUTES — NIA IV. FINANCIAL REPORTS: N/A V. CORRESPONDENCE: N/A VI. OLD BUSINESS: 1) Pending Disability Application — Robert Epstein — a) Special Board Meeting Minutes of December 12, 2012 for review. b) Five case related disability applications for review & discussion Case Nos.1, 2, 3, 4 and 5 Attorney Jensen explained the Board received Mr. Epstein's disability application, had a meeting and all should have received the minutes. The Board had deferred discussion to obtain the referenced cases from Attorney Kelley, and to provide Attorney Kelley the opportunity to present those cases to the Board. The Board could proceed on the application and the specific issue of whether Mr. Epstein can file his application because he is no longer an employee or a member of the Plan. 1 Meetings Minutes Special Police Pension Board Boynton Beach, FL April 14, 2013 Attorney Kelley thanked the members and explained the Martinez and Thompson cases. These cases looked at whether or not an application complied with the terms of the Plan and whether or not due process was followed. He explained this was a very unusual circumstance. A member of the Plan was terminated without notice. He believed all received a copy of the paperwork with the termination notice. The top right corner of the Employee Activity Report was dated September 25, 2012. There obviously was discussion ongoing between Police Department Management and Human Resources where they had an effective date listed. Neither Attorney Kelley nor Mr. Epstein had seen a termination letter until the Board provided it at the last meeting, nor had Mr. Epstein signed or received one. What he thought was notable was the document listed an effective date of termination as September 27th. Mr. Epstein was working Tight duty during that time, and he last worked October 2nd. According to the documents, he was terminated October 3rd. Until he was escorted to Chief Immler's office on October 2nd, he had no idea he was going to be terminated. Attorney Kelley believed the problem is the way the Plan is written as the Plan indicates a member has a right to apply. He thought there were discrepancies and ambiguities in the Plan language. It indicates a member must have a pre - employment physical prior to being hired. If that person is a member, having a pre- employment physical, seems to indicate that prior to being employed, one can be categorized as a member. Later, the Plan talks about retirees. The Plan does not say retiree; it says a member who is retired. When it says a member shall apply, there is no timing anywhere in the Plan for filing for the line -of -duty disability provision. It is clear the Plan requires one to be a member, but the definition of a member, in the Plan, says full -time employee. Attorney Kelley reviewed the prior cases he brought to the Board, which were the Raines and Granger cases which dealt with membership. In the Granger case, the member retired in 1995. Five years later, the member filed for a line -of -duty disability benefit and then reapplied in 2007. The individual had voluntarily resigned. The Court deemed it was the individual's choice to resign and he was not medically terminated. At the time of separation from the department, he was not disabled so he was not eligible for a line -of- duty disability benefit. When the Writ was sent to the Circuit Court, the Court looked at two determinations: whether procedural due process was afforded and whether the essential element of the law was observed. Attorney Kelley thought, with Mr. Epstein's situation, procedural due process was not afforded because he was not given the opportunity to apply after termination and "we get him on a got ya" - you are not a member, according to the definition of a member, even though it was ambiguous in other parts of the Plan. Further, Ms. LaDue was helpful in providing a copy of the Plan provisions, but she could not tell him if he had to file before termination or how long he had to file, because it was not provided in the Plan. At the last meeting, it was learned the Plan did not have a disability claim for 15 years and Attorney Kelley felt the Board was unfamiliar with the process. Mr. Epstein was 2 Meetings Minutes Special Police Pension Board Boynton Beach, FL April 14, 2013 unaware he had to file before termination. When Mr. Epstein visited Ms. LaDue in July, he had been placed at Maximum Medical Improvement (MMI) in May, and the doctor specified he would be on permanent light duty. The department continued to employ him on light duty from May through to October, and he thought he would continue to work light duty. In September, there was discussion of termination, but no one told him. Mr. Epstein was trying to improve his condition in the hope of returning as a law enforcement officer. Attorney Kelley's concern was if the Board denied the application because he did not fit into the category of being a member, than he is not afforded due process. He suggested treating him as a member and allowing the process to take place and see if he meets the other requirements for a line -of -duty disability pension including: > If he was working in the line -of -duty, > If he was totally disabled, > If the disability was permanent, and > If the department had full -time, light -duty work within the restrictions without a reduction in rank, salary and pay. If the Board allowed Mr. Epstein to proceed, the Board could address the provision later on. The case law he provided had some suggestions on how to do that, such as having provisions that if medically terminated, one can submit a line -of -duty disability application within 30 days of termination. The cases he provided talked about intent. He did not think it was the intent of the Plan to prevent someone from applying because they were terminated before they had the opportunity to do so. The Martinez case discussed the idea the application of the provision was to grant an extra 30 days after termination if an Officer was terminated for medical reasons. Based on that, the Court granted the Writ of Certiorari and Quashed the Board's Order. The idea is to give individuals a reasonable amount of time to apply, which was demonstrated in the cases Attorney Kelley provided. Mr. Epstein had no idea what his rights were because as much as Ms. LaDue provided all the information she could, he believed she was unclear what the rights and obligations under the Plan were and the timing was an issue. He requested the Board go through with the line -of -duty disability hearing and clarify language later on. Chair Athol expressed concern if the Plan wording indicated if one was no longer a member, it opened the door for those who left to come back and apply. As to Attorney Kelley's request to go through with the line -of -duty disability hearing and address the plan language later, there were other components to the issue that needed to be considered such as: • A review of email communications, > A review of medical records, • An independent doctor review of medical records and/or examinations, > The MMI and other procedures leading up the injury, 3 Meetings Minutes Special Police Pension Board Boynton Beach, FL April 14, 2013 ➢ When he inquired about his disability with Ms. LaDue, and ➢ What prompted him to so. At this meeting, the members did not have the benefit of that information and those are issues the Board needed to consider in order to review the entire matter and make a decision. The wording in the Plan did not allow for it, and it opened the door to a lot of other issues. Chair Athol explained this had to be handled first. Attorney Kelley had considered different aspects of the matter, and he inquired if there were many people going out on disability over the last 15 years. No one had applied, but if it was not permissible to come back and apply for disability once the employee left, it would not be known who would have come back and applied. Attorney Kelley had brought in the other cases because the Courts are clear 30 days is a reasonable amount of time to apply. He noted there were other provisions within the Plan that discuss 30 days and that is an item that could be consistent. He suggested 30 days from the termination date for medical or not - for -cause or within 30 days from the date of the termination would address the issue, and it could be done prospectively. Attorney Kelley pointed out Mr. Epstein's application was still within three weeks from his date of termination. He would have fit within that 30-day window, and his request would be a reasonable one. In July, he received notice of the MMI and his concern was he was being told he had restrictions, but he continued to work. Interestingly, when he found out the results of the MMI taken two months prior, it was not an issue and he continued to work another 3 or 4 months until they terminated him. He had no cause to think he would be terminated and his intent was to continue. Attorney Jensen explained the Trustee's job is to administer the Pension Plan as written. She acknowledged the cases that were provided, but those plans all had language that said specifically one had 30 days from the date of termination in this specific circumstance. The Boynton Plan did not have that language. The best way to preserve the integrity of the Plan and recognize the situation in the Martinez case was for the Trustees to deal with this situation in a hearing process. The Trustees recognized they have a fiduciary responsibility, but they cannot decide the issue without a hearing, reviewing documentation, or amending the definition of a member. The initial step is to uphold the language of the Plan in the case of when someone comes back 20 years or later. Chair Athol agreed. The Granger and Thomspon cases were long -term employees who were out and came back and filed for disability. In the Martinez case, the individual filed for disability before termination. The case was based on a delay in processing the application because he was not terminated for a disability, it was a disciplinary termination. The employee tried to file for a disability knowing the termination was coming and they stopped processing the paperwork. Of the cases provided, two were similar, having to do with disciplinary actions and in lieu of termination, they filed for disability. 4 Meetings Minutes Special Police Pension Board Boynton Beach, FL April 14, 2013 In a hearing atmosphere, there is the ability to review comprehensive records, communications and medical reports. Chair Athol commented it was the Board's obligation to uphold the pension Plan as it is written. Attorney Jensen commented they can look at language to add it, but there had to be a date. The line in the sand now is the language indicates member or current employee. If that is up to interpretation, that interpretation can take place in a hearing atmosphere. Attorney Kelley wanted to point out that because there is no line drawn, that provision is subject to interpretation and it is the Board's responsibility and ability to interpret the definition of membership as they see fit. As to whether there were any provisions within Chapter 185 that superseded the Plan's provisions, Attorney Jensen responded there were none. Some cases discussed it, and both decisions talked about the interplay. Of the two decisions made, one decision issued a Writ that Quashed the Order; the other one did not. Attorney Jensen explained that plan was a local plan that had different provisions than Chapter 185. The plan had to meet the minimums as required in Chapter 185. Procedurally, Mr. Epstein would look to the Board to make the interpretation. Attorney Jensen explained the issue was moved forward today and the Board denied the opportunity to file on the basis that he is not a member. They would send letter to Attorney Kelley and say they denied the benefit and list the timeline to appeal the decision. If an appeal was requested, the Board would schedule a hearing for them to state their case for the Board to decide and then make a decision. At that point, they would have the authority to subpoena records and take sworn testimony. Presently, they have some medical records that were provided by the City and an un- redacted copy. They have also received information from Dr. Kativ. Most Boards will not accept records from opposing Counsel. The Board's letter to Mr. Epstein would address whether he has the ability to apply based on the definition of "member" or assume they would argue both issues and whether he meets the other requirements. Chair Athol explained the first issue is just to apply. Attorney Kelley explained these meetings cost Mr. Epstein money and he inquired, because of the way the Plan was worded, whether they could do everything all at once. Attorney Jensen explained they would address the whole process. Chair Athol was concerned about putting the cart before the horse. He thought the first portion had to be addressed first. Attorney Jensen agreed that was the cleanest and clearest way to proceed, because they did not want to mix -up the two items. In this instance, because it is the application and the process, if the Board denied the application, it would not go any further. If they granted the application process and it progressed, the initial determination would not be a determination on the merits. Attorney Kelley explained they spoke about medical records for review, but he did not understand their significance. Chair Athol explained if the issues are split, the medical 5 Meetings Minutes Special Police Pension Board Boynton Beach, FL April 14, 2013 records may not be necessary. At that time, the Board can take sworn statements from people and obtain records. Attorney Kelley inquired, with regard to whether he was a member, what kind of information they were looking to obtain. Chair Athol responded they did not have the ability to get the information now, but he presumed all communications between the City, Human Resources, and emails to the fact Mr. Epstein knew or did not know he would be terminated, if there were any warnings referring to a pending termination, when the MMI took place, the circumstances surrounding it and communications and circumstances that prompted Mr. Epstein to visit Ms. LaDue to inquire about benefits, would be requested. If the Board obtained just that item, it would address the issue of whether he was a member or not. At that time, medical records would not be necessary. Mr. Epstein stated he was first notified of his termination on October 2nd when he was escorted to the Chief's office. Attorney Kelley noted the minutes indicate October 4, but October 2nd was consistent with the documentation. The Workers' Compensation pulmonologist was the doctor that issued the MMI. They sometimes have a nurse case manager go to the doctor and notify him/her of the MMI, the permanent impairment rating, if any, and what the restrictions are. The information goes back to the employer. Sometimes they notify the applicant, but if that conversation happens outside his presence, which does occur, they may not know that about it. They would only know about it when they received a DWC -25 form or some other form, or when someone in the department advises the employee that the doctor deems them to be at MMI and he /she may be entitled to a benefit if they are not working. The benefits are temporary total or temporary partial disability benefits. It does not discuss pension benefits. With MMI, once the employee is at maximum medical improvement for Workers' Compensation, whether they are working or not, they do not receive indemnity benefits, which are lost wage benefits, unless one is permanently and totally disabled for any type of work. The second thing the MMI speaks to is a permanent impairment rate which is when the doctor says as a result of the condition, the employee may have a percentage of impairment. The impairment rating has nothing to do with functionality. It simply tells Workers' Compensation how many weeks of impairment benefits they have to pay. Unless the employee gets a letter indicating he was going to receive a certain amount of weeks of impairment benefits, and here is the MMI date, that is the notification. The average patient or injured person could not say what is in an MMI. Mr. Epstein was not notified in May and Attorney Kelley was unsure if the City was notified in May because oftentimes, the nurse case manager will call the doctor and ask when the person would be at MMI or when they would expect them to be at MMI. Often the doctor will review the records and determine when the patient stabilized and there was no improvement. Itmay have happened in July with a May date of MMI. He did not know if he was given an MMI in May, or later. 6 Meetings Minutes Special Police Pension Board Boynton Beach, FL April 14, 2013 An inquiry was made whether the termination had been challenged. Attorney Kelley responded he did not know if a grievance was made. The termination came up October 2nd, and Attorney Kelley only handles Workers' Compensation and pensions. Mr. Epstein was terminated due to a medical condition so he could not grieve the matter. He contacted the Police Benevolent Association in January and was informed he had two weeks to make any kind of a termination grievance. Since he was not terminated due to misconduct or cause, he could not do so. Mr. Epstein was not eligible for Social Security because he is too young and too dedicated. As to the termination, when Mr. Epstein was terminated, there was a plan attached to the City policy giving an explanation dated September 25, 2012, which discussed MMI. It said the employer is not required to create a position for such an employee and it discussed temporary benefits ending once the employee is at MMI. It says, based on the Department's Personal Policy Manual Section A.4.K., employees may return to work with a Light -Duty Certificate provided there is work available. If no such work is available, the employee will remain on sick leave or Worker's Compensation until receiving a release to return to work from the doctor. Section B stated that employees who are in a personal disability status and not working will have their positions held for a maximum of six months from the date of injury or illness. After that point, they can be terminated. Taking that into consideration, July 7, 2012, was the six -month point they could release Officer Epstein from employment, but it was not written until September 2012. The memo came from the Human Resource Director to Chuck Magazine, the Risk Manager. Attorney Kelley explained the last time he met with the Board, he had not seen any termination documents. Mr. Epstein explained his attorneys inquired if he had approached the PBA and he has said no, because the PBA would only represent one in a criminal action, and this was not the case. He reiterated on October 2nd he was accompanied by Major Briganti and terminated verbally. When the meeting was over, they said go. He went back to his desk, collected his belongings and did not sign anything. Discussion followed the Board needed to vote to accept or deny the application and after that, if the application is denied, it can be appealed. Attorney Jensen explained notification is sent and the applicant would have an opportunity to appeal. If appealed, the Board would have a hearing and they would discuss the process for the hearing. Her recommendation is the Board take the information they have and not have an adversarial process and people would testify. Attorney Jensen's recommendation was for Mr. Epstein to present his case and show the Board why they should accept the application. The Board would make a determination based on what they present. 7 Meetings Minutes Special Police Pension Board Boynton Beach, FL April 14, 2013 Attorney Kelley noted the Board is supposed to be a five- member Board and one individual resigned and another was absent, which raised some concerns. Chair Athol acknowledged three members constituted a quorum, but suggested if Mr. Epstein would feel more comfortable, the issue could wait. He explained the four members would appoint the fifth member. Chair Athol could set up another meeting, but the Quarterly Meeting was scheduled for May 14th in the morning. Mr. Epstein and his Counsel left the meeting to confer. The Board took a five minute recess at 1:42 p.m. and reconvened at 1:52 p.m. Attorney Kelley explained they were fine with the Board making the decision whether to accept the application and move on to the next phase or deny it. Attorney Jensen explained they would work around Attorney Kelley's schedule. Motion Mr. Caudell moved to accept the disability as he (Mr. Kelley) produced. The motion died for lack of a second. Motion Mr. Llopis moved to deny the application based on the information they have right now, that he is not a member. Chair Athol seconded the motion that passed 2 -1 (Mr. Caudell dissenting.) Attorney Jensen explained three concurrent votes were needed in order to pass. Chair Athol recommended continuing this to a meeting prior to the quarterly meeting to get the process going. If desired, Attorney Kelley and Mr. Epstein could be present at the meeting via conference call; however, Attorney Kelley advised they would be physically present and they preferred to meet when all five trustees were present. VII. NEW BUSINESS: 1) Resignation Gary Chapman — discussion on appointment of 5th member of the Board. Chair Athol explained Gary Chapman resigned and the Board needed to appoint a Fifth Trustee. There were no requirements for the Fifth Trustee position so the Board could select one when four Trustees were present for a vote. Three affirmative votes were needed. Two members of the Board are sworn officers, elected by the membership. Those positions are currently held by Jason Llopis and Frank Ranzie. Two members of the Board are appointed by the City Commission that must be residents of the City. Those positions are held by Chair Athol and Mr. Caudell. The fifth member is appointed by the four. Once five members are attained, the Board determines who would serve as Chair and Secretary. 8 Meetings Minutes Special Police Pension Board Boynton Beach, FL April 14, 2013 Gary Chapman served as Chair and Chair Athol served as Secretary. Mr. Chapman stepped down and the Board needed a new Chairman. Chair Athol requested any one that was aware of an interested individual contact the Board and it would be discussed at the May meeting. Individuals who were interested were: Joe DeGiulio, Brian McDeavitt, Cory Gray, Lorinda Broberg, Brad Leitner, Henry Diehl and John Huntington. Chair Athol commented Mr. Huntington has attended the meetings on a regular basis. Mr. Ranzie's seat was uncertain and that was another position that may become available. Discussion followed that it would be hard to replace Mr. Chapman. Ms. LaDue explained Mr. Chapman was elected by Police Officers in 2000 and he served 13 years, longer than anyone else. He attended many seminars and Trustee schools in Florida and around nation and he gained a tremendous amount of knowledge. He guided the Board well. Chair Athol invited all to attend meetings. Discussion followed there was no provision to "unelect" a member. Any member could step down as they were not indentured. If terminated, the Trustee would have to vacate his /her spot. Mr. Chapman's position was one of the two positions requiring the Trustee to be employed by the Police Department. If something happened and a Trustee had to step down, they would try to have an election prior. If terminated and out on appeal, the Trustee would have to step down and the position be filled. Chair Athol explained the process for being seated on the Board. There were several individuals in attendance who did not identify themselves. Individually and /or collectively, they expressed concern over Mr. Chapman's resignation and whether his resignation had anything to do with the condition of the pension funds. Chair Athol explained the meetings are long and Mr. Chapman had another job. Attending the meetings was difficult for him. He did not resign because of the fund. As to the condition of the fund, Attorney Jensen explained an audit is done every year and the funds are held at State Street Bank. They have a bank custodian that holds the Plan's stocks and money. When payments need to be made from the account, Ms. LaDue sends notification to them which requires two signatures. The investment manager makes decisions about buying and selling, but they have no access to the funds. The fund also has a monitor consultant as well. There are many checks and balances and the Trustees have to submit documentation that is reviewed by the State of Florida every year and an actuarial evaluation is done each year as well. The Trustees meet at a quarterly meeting with the investment consultant and the monitor present. The monitor reviews and analyzes everything the investment consultant does and the monitor and investor check and balance each other. At the meetings, both the investment consultant and monitor make a presentation. The Plan employs an advisor who reviews all of the information prior to the meeting. The Trustees have to comply with Florida Law and Chapter 185. If they do not, they do not receive the 185 monies. No one can pocket money or run away. After the Madoff scandal, the emphasis was on transparency. 9 Meetings Minutes Special Police Pension Board Boynton Beach, FL April 14, 2013 Chair Athol explained there are many terms that fly around. Prior to 2007, pensions earned 13% to 18 %. He likened the Plan to a mortgage and commented most mortgages are not 80% funded. When the market crashed in 2007 and 2008, the country lost their shirts, and many plans lost 12% to 20 %. Their Plan's target was to eam 8% per year and if they meet that, all will be well. If the Plan made 6% one year, the next year it had to make 10% to break even. If it lost 10 %, then the Plan would have to earn 17.5% to 25% to break even. He explained they look at the Plan over the long -term and over a span of 30 to 80 years. It has been easy for entities that wanted to attack pensions to take a snapshot from 2007 to 2009 and say the sky is falling and if it continues the Plan will die. Very few plans, when they were 80% to 90% funded, worked on increasing benefits. Opponents used a disastrous snapshot and projected it over the next 20 years and then indicated it would collapse. If a snapshot of the 90s with the tech bubble was projected out, the Plan would be overfunded. The members tried to obtain the information source used in various news articles to find out where the figures came from, and no one could say. There is no study that exists, because they have tried to obtain it. The figures used were from 2008 and they had nothing to do with what was occurring. Another source of confusion was DROP funds. Chair Athol explained the DROP monies were in the same fund, but were accounted for separately. Last year, it earned 12% net of fees. The plan could reuse the monies. The members would earn 7% and the Plan would reinvest 4% and it worked well. If taking a snapshot of four bad years, the fund would look like a catastrophe, but in the long term, it was extra money to invest and when the Plan does well, it does well. There were concerns raised about top management retiring and drawing large pensions and using up the money. Chair Athol explained every year, actuarial studies are done. Income information is submitted to the actuary, they determine length of life, and how much one would make. There is a formula and it is all calculated. The more one made, the more one contributes which is the difference between a defined benefit and defined contribution program. Presently, benefits are defined for the employee and their contributions vary as it uses a percentage of what one earned. The Plan has a 7.75% target, and if met, the Plan can sustain payments down the road. The yearly report shows every single year and each year, the actuary receives all three PBA contracts, yearly income, they determine what raises were forthcoming, and the actual raises. All of those components are calculated, which is included in the report because these factors have to be considered in order to adjust the contribution amount. The Plan cannot be askew and not receive the proper amount of money. If that occurred, the Plan could not fund future benefits, the audit would be flagged, the Board would be notified and the 185 monies would not be issued. A question was posed if members would contribute more to the pension. Chair Athol responded that was a PBA and bargaining unit matter. It had been brought up several years ago by the PBA to voluntarily contribute an extra 5% to be used for the unfunded 10 Meetings Minutes Special Police Pension Board Boynton Beach, FL April 14, 2013 liability. Prior to a few years ago, the suggestion was not legally permissible. Members could not voluntarily contribute more to the pensions without raising benefits. There were many constraints. There are specific percentages and ranges in the different asset categories the Plan had to adhere to, and all of it is strictly monitored. He reported the Plan was on track. Last year, the Plan did well, as is the case this year, but no one did well during 2007, 2008 and 2009. A question was posed whether the City was going to revisit the pensions and restructure them. Chair Athol had no information. Senate Bill 1128 indicated, upon ratification of the next contract and from that point forward, by law, only 300 hours can be counted towards pension calculations and the retiree can no longer calculate in sick and vacation time towards pension payouts from that point forward per year. Mr. Caudell left the meeting at 2:25 p.m. If one had 1,000 hours saved in sick time and they entered the DROP, during that one month, the member would cash out that time at 50 %, so in essence one would cash out 500 hours of straight time that would go towards the pension of that one month. So the one month would be calculated into the best 60 months of the last 120 months. The Statute was not specific as to exactly how to do it, but the Pension Plan document indicated one would take a snapshot of their bank on that date and time when the contract is ratified. If one had 300 hours at that moment, that was the maximum that could be used, because they earned the benefit prior to the law changing. Mr. Caudell returned to the meeting at 2:27 p.m. A question was posed if the rate of sick time would be half of one's current salary or their salary when they entered the DROP. Chair Athol explained it was the amount of time accumulated and the hourly rate at the time it is cashed in. Those hours are frozen for DROP and the balance could be cashed out. Sergeant Leif Broberg explained he sent an email requesting the members be educated about the pension. He felt the Board had to fight to keep the 3.5% multiplier. The change in years of service before entering the DROP from 20 to 25 years and the benefits are invaluable to younger members. He explained his memo praised the Board and Gary Chapman. Everyone read articles about the move to take pensions away. One article about unfunded liability lumped the Police Plan with the General Employees and Firefighters' Pension Plans. He thought the members should actively take part in the Board. Individuals were upset when Mr. Chapman left, but he did not want to cause any panic. Mr. Broberg explained the joke in the City was the Plan was modeled after the Baltimore Plan. He pulled news articles about Baltimore which alleged their pension was going bankrupt and all the new employees would receive a 401K. A comparison of their plan to the Police plan showed Baltimore DROP payouts were half a million dollars and 11 Meetings Minutes Special Police Pension Board Boynton Beach, FL April 14, 2013 pensions ranged from $99,000 to $120,000. He did not know what their investments or shortcomings were, but he suggested the members Google different Police Departments in the nation to see what was occurring. Two of the biggest issues in pensions were health insurance and COLAs that are not tied to earnings in the Plan. The Boynton Plan does not offer health insurance. It was explained Attorney Jensen keeps the Board in order and ensures all actions are according to the rules. Chair Athol explained a quarterly meeting is an eye opener and it provides the progress of each quarter from start to finish. The meetings are focused on transparency and accountability. A question was raised whether anything could be done to make the Plan secure. Mr. Liopis explained there is a smoothing process. When there are years the Plan is negatively impacted; the losses are smoothed out over five years, which makes the Plan less volatile. The same held for five good years. If the Plan had five good years and one bad, it set the Plan back. The more the Plan earned, the less the City paid. The big issue was when the Plan performed poorly; the City had to make up the difference. The Plan has to keep losses on the books for five years and 2008 was just dropping off this year. When doing well, the Board would like to see the City contribute the same amount so in bad times, there will be an extra pool of money. All must be transparent. There are no secrets and minutes are taken. Pensions are long term. Membership on the Board has been fairly consistent. Mr. Broberg thought John Huntington was a good candidate to serve on the Board. An inquiry was made if one representative, per shift should attend the meetings. Chair Athol agreed it would be a good idea and explained Board members cannot discuss what goes on at the meetings with one another outside of the meeting. This meeting was a special meeting so they could address Mr. Chapman's resignation, otherwise the members cannot speak with one another on any Board - related business or item that may potentially come before the Board. A question about Mr. Epstein's claim and whether they found a loophole that would open the door for others to follow was posed. Mr. Liopis responded that based on the merit and the language in the Plan, they cannot in good conscience accept the application. Chair Athol concurred and clarified this was just for the application process. The Board has not arrived at hearing the disability. This was just a hearing for Mr. Epstein to present the facts to apply for disability. The Board had to determine whether he had the right to apply. If that happened, then he can apply and they can consider his application. The Board would be setting a precedent if they accepted the application, so the Board must be careful and thorough when making these determinations as they have a fiduciary responsibility to the Plan. It was explained a disability pension is 66 213% of basic monthly earnings. 12 Meetings Minutes Special Police Pension Board Boynton Beach, FL April 14, 2013 There was further discussion about Mr. Epstein's request. It was explained the Plan language requires one must be actively employed and the Trustees are bound by the interpretation of the Plan. The actuary was amazed they have not had a disability in 15 years. If the claim is denied by the Board, Mr. Epstein could appeal. If the Board accepted the application, they could take swom statements and have subpoena powers to best learn what occurred. If the application was approved, they would look at the injuries and determine whether it meets the criteria. The final determination by the Board was appealable. There was discussion about Trustee selection. Mr. Ranzie is an elected member of the Board. The Trustees intend to select a Trustee to replace Mr. Chapman at the next meeting. As to Trustees elected to the Board from the Police Officers, there is an opportunity to sign up and make nominations. They will hold an election in 30 to 45 days. Chair Athol explained they want to fill vacancies as fast as possible. The four members at the next meeting would appoint the Fifth Trustee. All were invited to attend. The meetings are held at 9:30 a.m. Due to the large amount of attendees present, a suggestion was made to use the Commission Chamber for the next meeting. VIII. PENSION ADMINISTRATOR'S REPORT: N/A IX. COMMENTS: Attorney Jensen explained Senate Bill 458 has had three readings on the floor. There is a Bill in the House that was stuck in the Appropriations Committee that the League of Cities did not favor. Employee groups are not happy with the Bill either, but it was more palatable than the Naples letter. It discussed how to use money going forward. If a plan was a supplemental plan, the dollars could be used to pay down the Plan's unfunded liabilities. If a plan was less than 70% unfunded, 50% of future monies could be applied towards the unfunded amount and the rest of the funds could pay the supplemental benefit. If a plan was not a supplemental plan and it had an 80% unfunded ratio, then 50% of the supplemental monies would go towards the unfunded liability, 25% applied to base benefits and 25% into a share account benefit, and everyone had to have a share benefit account established. Attorney Jensen explained she contacted the Division of Retirement to ascertain if the Plan was considered a supplemental plan as it did have some characteristics of one. She clarified if it was supplemental, it pertained to future monies and the 50% would pertain to monies received in August. The State was requiring 185 monies be matched for the 1% fund. Once the Plan was funded 70 %, 100% of the supplemental monies would be applied to the supplemental benefit. Attomey Jensen explained if it is a supplemental plan, the plan is deemed to be meeting the requirements of having a share account and she clarified there were all kinds of share accounts. Most pertained to active employees, but the Trustees could design it however they wanted. 13 Meetings Minutes Special Police Pension Board Boynton Beach, FL April 14, 2013 Attorney Jensen also clarified the State would use the GASB 25 version to calculate the Plan's unfunded liability and it was the actuarial accrued value of the funds over the actuarial accrued liability. She noted this would be a lower percentage. Currently, the Plan's actuarial value of assets was less than the market value. This was an additional reporting requirement that the State would require. It would cost more money and be more confusing. X. ADJOURNMENT: There being no further business to discuss, the meeting was properly adjourned at 3:00 p.m. ( L L @JLkMJ Catherine Cherry Minutes Specialist 041713 14 2 , i 1 , Fr i MINUTES OF THE BOYNTON BEACH POLICE OFFICERS' PENSION FUND QUARTERLY BOARD MEETING HELD ON MONDAY, MAY 14, 2013, AT 9:30 A.M. RENAISSANCE EXECUTIVE SUITES, SUITE 220, CONFERENCE ROOM 1 1500 GATEWAY BOULEVARD, BOYNTON BEACH, FLORIDA PRESENT: Toby Athol, Secretary Bonni Jensen, Board Counsel Scott Caudell Barbara LaDue, Pension Administrator Jason Llopis Frank Ranzie I. CALL TO ORDER — Secretary — Toby Athol — Acting Chair Toby Athol, chaired the meeting which was called to order at 9:30 a.m. II. AGENDA APPROVAL There were no changes to the agenda, and it was approved by consensus. III. APPROVAL OF MINUTES - Quarterly Meeting, February 12, 2013 Motion Mr. Caudell moved to approve the minutes. Mr. Llopis seconded the motion that unanimously passed. IV. FINANCIAL REPORTS: A) Quarterly /Annual Investment Review — PYE March 31, 2013 1) Russell Investment Group — Mary Jean (MJ) Candioto, CFA, Client Executive — Portfolio Review Ms. Candioto thanked Chair Athol for attending the Russell Client Conference. She explained she would first review what was occurring in the market, economy and Russell's updated outlook. She would review the Plan and then make a formal recommendation on what to do in the portfolio so they do not exceed the 25% maximum in foreign investments. Ms. Candioto explained in the U.S. market and economy, the one rule to follow to be successful in 2012 was to not fight the Federal Reserve. In the first quarter of 2013, U.S. markets were up 13 %. That performance was a continued effort to continue quantitative easing and keep rates low. Money continued to flow into U.S. equity markets. Another factor that contributed to this performance was housing continued to perform very well which added a lot into the economy. This cushioned the Meeting Minutes Police Pension Board Boynton Beach, FL May 14, 2013 impact of sequestration. Another change that occurred was in energy. Year -over -year, crude oil production in the U.S. was up 20 %, which allowed imports to come down 18 %. Returns from developed non -U.S. markets were not as good. They came in at 4.7% and shy of the 11% seen in the U.S. This was driven by the strong U.S. dollar. As a U.S. investor, if the dollar is appreciating and assets are held in Japan, the investor would feel the impact of the yen depreciating materially against the U.S. so on a local currency return basis, non -U.S. developed markets returned similarly to U.S. markets. In Japan, local currency returns were in excess of 20 %. When converted to U.S. dollars, the retums were closer to 10% or 11% due to the Japanese government devaluing the yen. This is critical to Japan's success because 70% of their economy was based on exports. By depreciating their currency, they were encountering investments. Year -to- date, the markets were up 72 %. Europe continued to maintain a fairly stable situation despite uncertainty in Italy and Cypress. This was evidenced by no significant market drops, Ms. Candioto spoke about whether investors should be concerned about fixed income. The Fund had a flat first quarter for the U.S. aggregate fixed income position. When the U.S. and global equity market returns were 6% or 7% cumulatively for the quarter, investors should not be overly concerned about the flat market. She expressed investors should be mindful fixed income helps stabilize the Fund. It has a lower volatility role than return- seeking assets. Russell Investments anticipated the Russell 10 -year treasury would increase by half a percent by the end of the year. Even if it increased by 1 %, there is a coupon built into the fixed- income portfolio that returns about 3.5 %. They were expecting great equity returns. Russell Investments continues to evolve the way they manage the fixed- income portfolio and there is some cushion taken into account where they anticipate interest rates to be. They maintain an active credit strategy to look out for benchmark bets to add value and diversification to the portfolio, and during 2012, they looked at ex -U.S. managers to add a different source of return and diversification in the fixed- income market. Russell Investments was not expecting any bond bubble, defined as a 20% or more drop in the asset class. The listed real asset exposure, which is a part of the Multi -Asset Core Fund, included real estate and listed infrastructure which did well. Commodities struggled the same way as emerging markets did with a short start and diversification was added to that position. As to what to expect in equities for the remainder of year, Ms. Candioto anticipated there would be some pull back, but not as much as in previous years. In prior years 2 Meeting Minutes Police Pension Board Boynton Beach, FL May 14, 2013 when there was much pull back, quantitative easing was ending and the housing market was not strong. Both of those factors were not present at this time. If a pull back occurred, she advised investors not to be alarmed as it was part of the normal cycle of economy and markets, and when it does occur, they look to the last 30 years. About 80% of the time if there was pull back, the year still ended in positive territory. There was brief pullback when the Chinese GDP figures were announced, and they came in at 7.7 %. They were waiting to see that pick up in the emerging market position. Russell Investments looked at periods of strong starts for the last 80 years with 10% or greater positive returns for the first quarter. There were 15 instances and 13 of them finished positively, averaging an additional 7%. The two that did not were Black Monday and the Great Depression. Ms. Candioto thought there was still more positive news to be had, but there always was the possibility of a short-term pull back. A snapshot of the Fund's market value reconciliation reflected the Fund started the year with $67.7 million and ended the first quarter at $68.3 million. As of May 10th, the Fund had $69.5 million. Year -to -date, the total assets, net of fees, returned 4.6 %; 53 basis points or half a percent over the benchmark. The Multi -Asset Core Fund, which had the equity component, came in at 7% and through May 10th, added another 3.5 %. Fixed income returned almost 60 basis points more than the benchmark, which showed the value of active management, particularly in this position given the interest rate environment, and was up additional 90 basis points through May. Chair Athol requested Ms. Candioto speak about the core portion of the fund or the core plus product, which covered a significant portion of the conference and to explain the differences between the two, if they made any changes or updates, or if they were planning for a Core Plus, Plus product. Ms. Candioto provided a snapshot for the Multi -Asset Core Fund. It is a well- diversified portfolio, not only on an asset class basis, but on the classic Russell portfolio basis having more than one manager. It is a strong diversified portfolio. The Multi -Asset Core Plus fund is a new fund Russell launched at the end of the first quarter. The purpose of the fund was to have a higher return although it had more volatility. Clients looking to have exposure to frontier markets and dedicated high -yield and emerging - market debt were included, which are not normally included in trade portfolios. The Core Plus fund provides that access to that segment of the market. It has a higher return and higher volatility, but was similar in terms of its core components and had less exposure to the active /passive side. It tapped into pieces of the U.S. equity market. The Core Plus does so, but to a lesser extent. The Boynton Beach Plan was one of the first to invest in it. So far, it has been a good move in terms of obtaining the types of exposure the Plan needs by going into the current market environment and other clients were following. 3 Meeting Minutes Police Pension Board Boynton Beach, FL May 14, 2013 Chair Athol thought for the long term, the core product suited the Plan better. There are a few Defined Benefit plans looking at the fund, but it is also geared to non - profit clients looking to meet return expectations so they need more aggressive exposure. They have a longer time frame and more control over their spending, in many instances, than a Defined Benefit plan would. Currently, the Plan is underweight in fixed income by just over a percent. After the quarter, they moved about 80 basis points and were now about 2% underweight to fixed income. Other issues with the portfolio, over the last six months, were the underlying managers, particularly in the global space, saw value in Europe. Until recently, this market was a depressed market across the Board due to macro trends. For managers with a lot of expertise, they sought companies with value that were overly depressed. This was the case with large multi - national firms that are not depending exclusively on Europe and consumer purchases. At the same time, Russell managers were concerned with the beta risk that came along with Europe, so they allowed managers to make those bets, but sold futures to get rid of the beta European exposure. By the end of last year, they purchased U.S. and this year, they started purchasing in Japan and Canada due to the outlook in those markets. They manage risk in the total portfolio and it paid off well. Discussion turned to prior discussion of the fear of the Chinese market going wild and doubling, and many investors were pulling out of those markets. Chair Athol inquired if the core fund reduced the funding there to under 25 %. If the trend continued, by October 1st, they will be at 25% or less in the European markets. Ms. Candioto explained Russell Investments was making shifts in terms of the asset allocation on an ongoing basis. There is a 3% band around their ability to allocate. Even if shifting from emerging - market equities into real -asset exposure, there is quite a bit of non -U.S. exposure and the same in fixed income. As times goes on, some of the non -US exposure may go down in the multi -asset core fund and they potentially could see the reverse in fixed income. As to emerging markets, it is volatile, but 45% of the index is made up of six or seven countries. Russell Investments has been seeing great returns from that area and great opportunities from other markets such as the Philippines and Mexico. Russell Investments manages the portfolio with a tracking error and total risk relative to the benchmark. They will not sell out of emerging markets, and there would be more tactical moves at the margin. Ms. Candioto explained the recommendation is to move 20% from the Multi -Asset Core fund into a pure U.S. equity product. The Multi -Asset solution has as much as 50% invested in non -U.S. and fixed income had about 15% invested there. The only other asset class the portfolio had was the private real estate, which is pure U.S. exposure, but it is not impacted enough at the margin. The solution in the U.S. space is a 4 Meeting Minutes Police Pension Board Boynton Beach, FL May 14, 2013 defensive U.S. equity strategy. This is something Russell Investments has done over the past few years. They merged their old quantitative equity fund and it dovetailed with the multi -core solution. It focused on companies that have a high - quality bias and a low volatility bias. The managers who handle the portfolio are held to a benchmark that is defensive in nature. High quality meant lower- leveraged companies, high returns on assets and a lower- earnings variability. It should provide better downside protection and the second part is counter intuitive. Over the long term, these types of stocks have outperformed their higher -risk counterparts, which was surprising. The largest driver was active managers that were hired to be the benchmark. The manager would typically buy higher - volatility stocks to beat their alpha expectations. As a result, the securities tend to be under purchased. A second component had to do with the market drop. If it dropped 20 %, one had to earn more than 20% to recover, so securities that have lower volatility over time tended to outperform those that have higher -risk characteristics. Ms. Candioto reviewed a graph showing improved downside protection. The fund was positioned to cushion the portfolio when the markets drop. When markets take a quick upswing, the product would lag the broader market over the long term. Historically, defensive securities outperformed, and it is possible that could occur going forward. They were confident in their downside protection and lower volatility. None of the funds closely resembled the Multi -Asset Core Fund because they were all U.S. equity benchmarked with different style characteristics. The Multi -Asset Core Fund has U.S. and non -U.S. exposure including commodities, real estate and some fixed income. From a style perspective, the fund currently has a slightly defensive bias between what would be seen on a relative basis between the Russell 1000 Index and the Russell 1000 Defensive, but the returns would look very different because one was a global fund and a diversified product instead of just pure equity. Mr. Liopis inquired, if moving to a more defensive posture, the fund would be limited in its ability to capture the upswing. Ms. Candioto spoke about the differences between defensive and dynamic performances in U.S. Large Cap and explained it is not that the product would underperform anytime the market was increasing, but would lag when there was a quick macro -shift into equities. Over a full- market cycle, this would have as large, if not larger returns, from a pure core U.S. equity product and a lower risk, but there would be some discrepancies in the market cycle. For the long term, it had lower risk and potentially higher returns than were seen historically. A snapshot of how the product would impact the portfolio on a long -term basis was given. The current allocation has a long -term expectation of 5.76% and shifting the 25% into the defensive U.S. product, the return would be 5.26 %. Over a 20 -year term, 14 basis points would be lost. Conversely, the product lowers the risk profile, and when adjusted, in terms of how much return one would receive per unit of risk, it would increase the return. The focus was directional. 5 Meeting Minutes Police Pension Board Boynton Beach, FL May 14, 2013 The fund's fee structure was designed in a way the fees would not be not impacted as long as the fund stayed within a range based on Russell Investments recommendations. Attorney Jensen noted the fees were built around the fact the fund was putting 65% into the multi -asset product. They are in an expensive asset class and would be moving to presumably, a less expensive asset product. Ms. Candioto explained the Multi -Asset Core Fund has some characteristics that make it a more expensive product, such as exposure to real assets and non -U.S. exposure that was balanced with investments that were cost effective. Twenty to 40% of the fund could be managed passively. The U.S. equity product defensive is a 100% actively managed product. The fees are structured for the multi -asset core. The proposed large cap defensive U.S. equities fall between 60% and 70 %, the fixed income falls between 25% and 40 %, and the fees stay constant across the Board. Attorney Jensen had anticipated there would be a fee concession. The fee was arranged around the fact they were moving to the multi -asset core product. The fees increased by 10 basis points. Ms. Candioto agreed to speak with the firm's staff regarding the pricing arrangement and confirm the details about what the Fund came out of. The fee was 75 basis points. Russell Investment offers more than one fund in the U.S. large -cap space and looked at other options. One of them was concentrated equity, and in having this product, it would have increased the fees. It centered around the cost of active management and she would research the matter further and obtain an answer about what is driving the lack of change in fees. Chair Athol inquired about the overlap of funds if moving from 60% to 40 %. Ms. Candioto responded the managers in this fund are not used for the strategies in the multi -asset core, so there was no direct overlap exposure. The change would increase the exposure in the U.S. space and would elevate it above market cap weight and have a home country bias, but that was not something she understood the Board thought was an ideal solution. Chair Athol explained come assessment time, the Fund needed to be within its guidelines. Frank Wan, Head of Research, BCA, had concerns. The recommendation was the result of the Fund surpassing the 26% limitation. It was not based on economics. In reviewing compliance for the quarter, the Fund was at 21 % in international. The multi asset core, as a result of what was occurring globally, was tilting away more defensively. The U.S. market rose, but other markets trended flat or were negative. Opportunistically, he questioned selling something at a discount and then going back to the U.S. market at a premium rate. He also commented Russell Investments was retained to give ideas and provide access to products the Fund could not access. In looking at the overall allocation, he was concerned they would be entering a situation when the Federal Reserve just announced they would stop the easing. If that happened, the reversal would occur and the U.S. market would trend backwards. The timing may not be perfect, but he thought it would 6 Meeting Minutes Police Pension Board Boynton Beach, FL May 14, 2013 be prudent to defer this for another quarter before moving forward. He thought, ultimately, it was a good idea to revisit the allocation towards a heavier domestic allocation given the compliance considerations. Attorney Jensen inquired if the Board moved to reanalyze the portfolio, if the Board could authorize a sale into another product and authorize Mr. Wan to bring the allocations into compliance as needed. Mr. Wan explained they were monitoring the plan on a monthly basis. That was their largest discouragement with Russell Investments. They have good individual products, but aside from Glenn Harris and Ms. Candioto, no one really focused on the 25% limitation. He thought the Trustees could keep discussing it or develop language to, at various times within the quarter if they see an immediate concern, allocate money back to the product in multiple steps; not 25% all at once. Chair Athol thought, other than the Trustees and the State limitations, it would not normally be a concern to investment consultants. The Fund was doing well, but the Trustees, because of the Statute, had to pull back into something that earned Tess money to try to meet the rules. Mr. Wan explained they want Russell Investments to have more leeway with their investments. They were going back to where they started. Four items were much easier to manage versus judging Russell on picking large caps. Mr. Wan did not see an immediate need to move, and it would buy them time, and Ms. Candioto could also research a lower fee. Chair Athol commented many managers were moving to protect against the low side of the market. The Fund was hurt by two or three bad years. If that could be stopped, the good side of the market would take care of itself. Mr. Wan explained Russell Investments is given a lot of authority to hedge the currencies and part of their bets internationally. Based on their overall economic views, the portfolio made the wrong bet on the Japanese currencies. When reviewing the fund on a merit basis, there were many things that seemed contradictory to the overall, economic theme mentioned in the earlier pages. Mr. Wan explained they will have to monitor more carefully, but they want a longer track record to see how they performed. He did comment the funds did quite well for the quarter, but would like to view a longer period to determine how the fund fared. Mr. Wan commented overall, the portfolio looked very good and modeled the Board's models so he did not have drastic concerns about moving from domestic to international. Chair Athol suggested running a comparison between the multi -core fund and their former allocation, perhaps on a yearly basis, and Mr. Wan agreed a comparison review once per year was appropriate. 7 Meeting Minutes Police Pension Board Boynton Beach, FL May 14, 2013 The largest risk posed was bonds. Bonds had to eam 7.75 %, but the portfolio was carrying about 35% in bonds. The good news is rates will stay low, but bonds will earn very little money. Mr. Wan did not believe rates would increase, so monies would not be lost. Bond performance was up for the quarter, which was a rarity because the index was down. Bets on global and higher -yield bonds paid off. Portfolio managers at Western Management started purchasing floater -rate loans by paying a premium and Mr. Wan cautioned against reaching out too far on a premium curve or risk spectrum to save the amount of money the fund earned from bonds. 2) Burgess Chambers & Associates (BCA) — Burgess Chambers, President Frank Wan, Head of Research 1) Fund Performance Review. Mr. Wan announced the firm just celebrated 25 years in business and he thanked public employees and safety officers. Mr. Chambers started the firm in 1988 and grew it into a firm handling $3.1 billion that was independent and fully transparent. Fiscal year -to -date, the Fund surpassed the 7.75% rate of return. As of March 31st, it was at 7.71% and Mr. Wan believed today was around 8.5% or 9 %. As the world thought Defined Benefit plans were losing money, this went well and the Fund made money at the right time. He also announced Burgess Chambers & Associates (BCA) revised the Investment Policy Statement to accommodate Russell Investment's new strategy. Despite a good quarter, some funds lagged the benchmark which was expected. Since 2009, the lower - quality companies rallied around the world. Mr. Ranzie left the dais at 10:25 a.m. Mr. Wan expected, moving forward, Russell Investment's would hold their own. He explained when the Federal Reserve decides to make adjustments, Russell Investments should protect on the down side. As to compliance, the Fund was underweight towards equities at 66% versus 70 %. Ms. Candioto explained they did not have the ability to look at intra models because they do not have the detailed holdings from the managers on a level to dissect them. There was brief mention the State may change the 25% cap in international investments. Chair Athol noted there were many changes through the years. For the quarter, the Fund, gross of fees, was 4.8 %. For the five -year period, the Fund earned 4.7% including the effects of 2008. Mr. Ranzie returned to the dais at 10:28 a.m. 8 Meeting Minutes Police Pension Board Boynton Beach, FL May 14, 2013 Even including the negative fiscal year, the Fund was still making money. Each quarter they moved away from 2008, the Fund does better. If the 8.5% rate of return continued, the funded ratio will go down at least 5% or 6 %. Mr. Wan had no other drastic concerns, but he agreed to meet with Russell Investments to ensure both parties were in accord. Chair Athol explained he liked the way core fund performed so far and it was important to ascertain the distinction between what the State considered to be an international investment and what others considered them to be. He inquired, as long as the allocation stayed within the range, if there were any other suggestions. Mr. Wan responded the Board should not pursue the core plus, plus fund. The frontier market, on a risk - adjusted profile, was less risky than emerging markets, but what happens when investing in Brazil and China because they do a lot of business together, is they move in the same direction, and as an example, Venezuela and South Africa have no relationship. When blending companies that are not globalized and localizing individual pockets in the world, the relationship is Tess correlated. Mr. Wan did not believe, long- term speaking, the Plan needed to take that much risk away from the core competency of the Plan. Additionally, the Plan has a 7.5% pocket of exposure to commodities in the mult -core strategy, and Mr. Wan foresaw a continued decline in all commodity prices. He explained the U.S. has horizontal drilling. As a component of commodities, this would affect oil prices. Supply and inventory would increase and prices would fall. By 2018, Mr. Wan expected the U.S. should be independent natural gas exporters of the world. This would create a downward pressure in commodities. At the same time, when looking at the U.S. economy compared to the rest of the world, the U.S. is much healthier than they are. The global economies were going through what the U.S. went through in 2008 and 2009, but the U.S. was recovering and the foreign economies were trying to stabilize, so the U.S. dollar was appreciating and could buy twice as many goods, which drives down prices. In terms of goods, Mr. Wan has seen deflationary concerns in parts of the world. Federal Reserve Board Chairman Bernanke said they did not see any signs of inflation despite the Federal Reserve buying the mortgage - backed securities and treasuries. Without inflation, commodity prices were not expected to rise and if holding 7.5 %, not expecting to make any money was a short-term concern. Chair Athol thought the fund could comfortably stay with the allocation and monitor it monthly. It was what the Board wanted for a long time and the strategy was working. He acknowledged much of it was Florida driven, which Russell Investment's did not have to contend with, so the Board had to make things fit. Chair Athol commented it would be a floating number on a daily basis. The trend now was to pull back. Last time it was viewed, it was 4% under the limit. Mr. Wan commented based on one of their analyst's reviews, the contributions made towards Russell Investment's fund, instead of applying it towards equities, were placed 9 Meeting Minutes Police Pension Board Boynton Beach, FL May 14, 2013 in the fixed- income bucket which helped the process. If they kept all at cost, even though the market may rise, they would still be in compliance. He inquired if the Board would consider a zero percent target with a zero to 15% range, or on a monthly basis, if they see a need to rebalance away from International investments, he should send an email. Ms. Candioto explained funds were daily traded and as soon as alerted, there would be a turn around of a few days and the fund can trade at any point. If they want a U.S. product, it could be done. If anticipating it would be no more than 15 %, she explained the fee agreement has no restriction in defensive or the Multi -Asset Core. If the Board wanted it to be Tess flexible and be limited to 15% to a pure U.S. product, there could be a positive fee impact. Chair Athol agreed with Attorney Jensen's suggestion she and BCA get together to determine a method and Mr. Wan monitor it. If something occurred that was alarming, they could move on the fly as opposed to a two or three -day turnover. Mr. Wan thought by August 31st, if the Fund was under 24.5 %, they would do nothing, but if international exposure was over 24.5 %, they would move 5% of the funds and effect a simple rebalance. V. CORRESPONDENCE: N/A VI. OLD BUSINESS: 1) Disability Application pending on Robert Epstein — Status Attorney Jensen noted the absence of Mr. Epstein and his counsel, Attorney Kelley. Ms. LaDue had not heard anything from them, but she did not send them a copy of the agenda. The members thought they wanted to attend this meeting. Attorney Jensen believed they would be here, and the Board did not reach a decision at the last meeting because they needed three affirmative votes. The vote taken at that meeting was two to one. Attorney Jensen understood they would be present and they had offered them the opportunity to appear by phone; however, Attorney Kelley responded they would attend in person. Chair Athol commented on the application process, and the interpretation of termination was the actual termination date and whether one was allowed to apply after or not, which was all they were discussing. The actual disability application or process, or even the injury has nothing to do with what the Board discussed. It was only the window to accept the application and whether it was a valid application due to him applying after he was terminated. The interpretation was whether one had to be a member in that status to apply or not. It was Chair Athol's understanding one had to be employed to apply. If there is a glitch in the language or language that needed to be revisited, the fear was it left a gray area, and it opened the opportunity for past employees to apply for disability. 10 Meeting Minutes Police Pension Board Boynton Beach, FL May 14, 2013 If the process ends with the Board denying the application, the applicant is afforded a hearing on a procedural basis. The Board can obtain all the information they needed, i.e. whether the information was known, what the applicant had or was told, and the Board could obtain witnesses and interview people. It was not a desire to tum down the application; it was a desire to move forward with a process to go to a procedural hearing and to obtain the documents. He inquired if there was any way to continue the process without denying the application. Attorney Jensen explained Attorney Kelley made equitable arguments, but in order to get to those arguments, one had to be in an appeals -type process because the Trustees are responsible for reading the Ordinance and fulfilling its responsibilities. The cases Attorney Kelley presented to the Board made the concern the Board had of opening the door to former employees applying for disability benefits more valid. Attorney Jensen suggested tabling the item and contacting Attorney Kelley to advise the Board wants to move forward with making a decision. There was agreement to table the item. Attorney Jensen expressed concern that the longer the Board did not deal with this issue, the longer it would take to process the application. Chair Athol agreed and pointed out they had a special meeting. They tried to move the issue forward, and wanted to deal with the matter at this meeting. Attorney Jensen would contact Attorney Kelley to obtain a response. Motion Mr. Llopis moved to table the item to another meeting. Mr. Caudell seconded the motion that unanimously passed. 2) Gary Chapman — Form 1F — Final Statement mailed March 13, 2013, and Form 1 for 2012 pending Ms. LaDue confirmed she had the form from Mr. Chapman and the other Trustees which will be mailed. 3) Fifth Trustee This item was discussed at the last meeting. Four Trustees needed to appoint the 5th Trustee. There was some discussion at the last meeting of interested parties. Chair Athol had mentioned John Huntington had attended prior meetings, but his residential location may be an issue in the future. Joe DeGiulio and Henry Diehl were interested and Lorinda Broberg approached Mr. Caudell at the last meeting. The Board opted to hear from Mr. Huntington as he had always attended meetings. Mr. Huntington, who was present, commented he was always interested in serving on the Board, and when Mr. Chapman was contemplating leaving the Board, he asked if he was interested in stepping in as he would be his first 11 Meeting Minutes Police Pension Board Boynton Beach, FL May 14, 2013 choice. Mr. Huntington advised him he was undecided where he would live in the near future. For all practical purposes, he would love to move, but he has roots in Boynton Beach. He anticipated moving within a two -year period. He would be interested in serving and had applied for Mr. Llopis's position. Chair Athol expressed confidence in Joe DeGiulio and Mr. Huntington serving. Mr. Caudell nominated Mr. Huntington to the Board. Discussion followed about Mr. Huntington and how much goes into being certified as it is an expense and if it would it be something the Board would consider for someone who may only be able to give a two -year commitment as opposed to Joe DeGiulio. It was also noted plans change and it was possible Mr. Huntington could move in five years. The issue was if Mr. Huntington was 100% committed to be a pension Trustee to which Mr. Huntington responded he was. Mr. Caudell also noted certification was encouraged, but not required. Mr. Liopis commented he did not doubt his commitment as he consistently attended meetings, but he had concerns as to how long he would serve. He noted Joe DeGiulio was here and would be for a long time. Upon inquiry if Mr. Huntington had any prior training or schooling regarding pensions, Mr. Huntington responded his only interest was following the market and attending meetings on a personal level. Mr. Ranzie seconded the nomination to elect John Huntington to the Board, as regardless of the future, he would commit 100% to the Board as shown as a member. He had attended the meetings and he believed he had the pension's best interest at heart. Vote The vote was unanimous. The next step was to be appointed by the City Commission as a ministerial duty. VII. New Business: A. Invoices for review and approval: 1) Russell Investment Group — Quarter End — March 31, 2013 - $124,775 2) Russell Payment Services — Quarter End March 31, 2013 - $877.41 3) Per y& Jensen — Service February, March and April 2013 - $4,096.20 12 Meeting Minutes Police Pension Board Boynton Beach, FL May 14, 2013 4) Burgess Chambers & Associates — First Quarter Fee - $5,000 5) Gabriel, Roeder, Smith & Co. — Service January/February 2013 - $3,637 & $5,676 Motion Mr. Llopis moved to pay the bills. Mr. Caudell seconded the motion that unanimously passed. B. Verification of Retirement Benefits: 1) Daniel R. Harvey — Vested Deferred Benefit Mr. Harvey terminated employment and since he was vested, decided to leave his employment contributions in the Plan to collect a deferred monthly benefit to begin in June of 2025, his normal retirement date. Motion Mr. Caudell moved to approve the benefit. Mr. Llopis seconded the motion that unanimously passed. C. Attorney Report — Bonnie Jensen 1) Senate Bill 458 /HB 1399 — Update of April 18, 2013 Attorney Jensen explained the Board no longer had to discuss Senate Bill 458 as it did not pass. She explained there were three bills that would impact the Board in some way. The first one had to do with the Ethics Law, which was signed by the Governor. The legislation affects the Board via Form 1. The form can now be completed by one's attorney or CPA on the members' behalf. The State would put the form online. Forrn 6 for elected officials would not be scanned and available online. She did not believe the same would hold true for Form 1 at this point. The Commission on Ethics is supposed to put together a system for the members to file online and this is supposed to be available by 2015. Chair Athol inquired about using one's home address. Attorney Jensen explained to maintain confidentially, members can use a work address as opposed to their home address. The forms currently are not scanned, but they are public record. They also added a protection clause if one made a material omission from their report. As to what is considered an asset, Attorney Jensen explained they added intangible personal property, the DROP and Florida Pre -paid funds. The State divided the form into two sections. There were instructions if one would file on a dollar value or on a 13 Meeting Minutes Police Pension Board Boynton Beach, FL May 14, 2013 percentage basis. Chair Athol commented he just entered the DROP, but he was still working full -time, and he inquired if he had to declare it. Attorney Jensen explained it depended on the value of the DROP as a percentage of assets or dollar value. The dollar value used to be $10K, but Attorney Jensen was not sure it still applied with the new requirements. The third thing the Ethics Commission enacted that impacted Form 1 filers was the State of Florida would accumulate money because of Form 1 filings and individuals failing to pay fines. They added a provision that indicated if fined, the State can gamish wages to collect it. Senate Bill 50 required all public meetings to have a public comment section on the agenda. The Board can develop rules around the public comment, such as a time limit per speaker or devote a set amount of time at each meeting to allow public comment. Senate Bill 534 impacts the Board the most as it is a reporting bill. The public comment bill has not yet been signed into law, but the Reporting bill does have controversy. It requires public pension plans to have another actuarial valuation done. Going forward, the Plan has to have a regular actuarial evaluation to advise the City how much money to put in the Plan. The Plan will have a 534 Actuarial Valuation to measure assets versus 200 basis points below the assumed rate of 7.75 %, so 5.75% will be the Board's measurement tool for the Plan's assets, and the Plan will likely be unfunded more than the fund currently was. Attorney Jensen was unsure why the State was doing this. Chair Athol inquired if this was connected to the proposal that if at a certain funding level, the Plan would not receive its 185 monies. Attorney Jensen did not know, but commented the League of Cities was opposed to it and it was an unfunded mandate and unnecessary expense. It has a provision to require all plans to use the RP 2000 Mortality Table which the Board was already phasing in. Chair Athol inquired if this was something the actuary who prepares the normal report could add on. Attorney Jensen believed it was. She did not know if this or next fall the plans would have to use the new GASB /FASB 68 and 67 reporting requirements, which requires an additional actuarial valuation so the City could include it in the Comprehensive Annual Financial Report and add the full liability of the Plan onto their financial statements. There is a potential that in the goal of transparency, they will have three actuarial valuations going forward. She commented the actuaries were opposed to it, and several actuarial companies in Florida tested against it. On a different matter, Chair Athol commented he received an email regarding a public records request he would forward to Attorney Jensen. 2) Reemployment of Vested Terminated Members — discussion Attorney Jensen explained there was discussion about someone that was rehired and how to calculate their benefit. The Board talked about two different ways to calculate it. 14 Meeting Minutes Police Pension Board Boynton Beach, FL May 14, 2013 Chair Athol explained for the benefit of the attendees, there were two current employees that asked about buying back time. The question was how to treat that type of circumstance. Attorney Jensen explained there were two ways to address this: > Recognize he left, vested and terminated, but coming back he is a new employee. He would already be entitled to his benefit and it would not be touched, but he would have to vest again. > Undo the calculated benefit and add to the years of service. Going forward, he would be vested and his benefit would be calculated at the end of his years of service. Trish Shoemaker's Office liked adding on, not re- vesting, and they would just build on what he already had. A question was posed if he left at a different benefit level. Attorney Jensen explained it would not change his multiplier and he would still be able to take benefits while still working in 2016. The Plan will have to have a provision that said he could do so and he had to be at normal retirement age. Chair Athol thought he would collect on whatever it was at the time of retirement. There would be no loss of contributions. If he worked for 10 years, vested, left his contributions, and came back, he would be starting his 11th year. If he worked another 10 years, he would reach 20 years of service and could collect. Otherwise, he would vest at 10 years with what he had before, essentially retire and then 10 years into his new career, the Plan would start paying him the benefit. Attorney Jensen explained the Plan would have to allow for in- service distributions. Chair Athol inquired if the Plan had a provision to not allow it. Attorney Jensen explained there is a provision in the IRS Code that was added in 2006 which allows for in- service distributions. Prior to that time, there was no such thing. To receive a benefit, one had to not be working there prior to 2006. The IRS Code indicated "A Plan will not be disqualified it if provides for in- service distributions at age 62." It seemed to make sense to continue on the process with the gap. Chair Athol inquired if there was a downside. Ms. LaDue expressed her concern was the first 10 years when terminated, his hourly rate was high. Now he is starting from scratch and in the next 10 years, he may not have as high an average salary. Chair Athol explained he was inquiring about the expense to the Plan, not the employee getting a lesser benefit. Attorney Jensen thought they could consult the actuary for an analysis. She did not think either one would be much different in terms of an impact standpoint. Chair Athol thought this could be analyzed and calculated in general, so the Board would know what would happen if this occurred, and the best and most economical way for the Board to deal with it. Ms. LaDue commented she has something in the employee's file from the actuary regarding frozen benefits and she agreed to forward it to Chair Athol. He sought to 15 Meeting Minutes Police Pension Board Boynton Beach, FL May 14, 2013 determine how this would affect the Plan if it goes forward. Mr. Ranzie did not think there should ever be a situation that would allow one to collect benefits while working. Attorney Jensen agreed there were several reasons why in- service distributions should not be allowed. Mr. Ranzie inquired what the calculation would be if the multiplier was changed and someone that left at 3 %, came back with 10 years vested at a different rate. He questioned when they reached 20 years, the calculations have to be put into place as to what their benefit would be. Attorney Jensen explained in Palm Beach, there are employees that are entitled to their earlier retirement benefit, which is substantially different than their current and ongoing benefit. They would add the two pieces together when they could collect. They would have their frozen benefit and add it to the second calculation comprising the two pieces of the retirement benefit. One question is do they have to re -vest and the second is the calculation. Chair Athol thought the only problem is one was working for 10 years and has a 2.5% multiplier, then leaves for 10 years, comes back and the multiplier is 3.5 %. If he stayed for a week, he would get the 3.5% multiplier because he would not have to re -vest. Attorney Jensen believed the benefit would have to stay at 3% because there is a cost because he was not included in the group for whom the 3.5% multiplier was calculated which was assessed at that time based on the population they had on that day. Whatever benefit one left with was frozen until one reached retirement age to collect. If one came back for a week, one would get a week of 3.5% for the new benefit. If one returned and worked 10 years, the employee benefit would be calculated on five of his best 10 years from the new 10 years at the new benefit. The actuary can explain what would occur and they would be contacted about the matter. Chair Athol inquired about Ron Ryan and Vincent Brooks, who had left employment, taken all their money out, returned, were here for three years, and asked about purchasing their time back. It is clear in the Plan one only had six months to initiate the full cash buy -back payment process. After that six months, one was no longer eligible to do so. Chair Athol explained the reason it is different than someone coming from an outside agency is because the calculation method is completely different. Attorney Jensen clarified the Plan only allows returnees to buy back Boynton time for less within six months of rehire and it is significantly less because all they had to do was buy it back with their contribution plus the interest it would have made. If one bought back time outside of that opportunity, it is purchased at the full actuarial cost. A returnee can buy back Boynton time as random time, because it is otherwise qualifying service for which they would not otherwise be entitled to a pension benefit. Ms. LaDue commented the Plan only says Boynton time had to be purchased within the first six months of re- employment. Purchasing service from other institutions can be 16 Meeting Minutes Police Pension Board Boynton Beach, FL May 14, 2013 done at anytime and there is a definite difference between the two items. A question was posed if the language barred employees from purchasing Boynton time as random time. Attorney Jensen read "No police officer will receive credit for years or fractional parts of years of service if he or she has withdrawn his /her contribution to the fund for those years or fractional parts of years of service unless the police officer repays to the fund the amount he /she has withdrawn, plus interest as determined by the Board in accordance with Section 18.172." Ms. LaDue pointed out the next section addressed purchasing service from other police entities. When any former police officer is employed, he /she becomes a member upon re- employment as a full -time police officer .... " and after brief consideration, Attorney Jensen commented it was arguable that they could not and it did not seem fair. The theory behind the language was the buy -back of Boynton time is a very specific different cost than buying back time from another agency. When the language was included, it could be read both ways. it could be interpreted one cannot buy back Boynton time unless initiated within six months, no matter how it is calculated. Attorney Jensen explained it could be done that way, but the idea was it is a different calculation because the City contributed money for the employee during that period of time, which remained in the pension fund. It was pointed out if the employee understands the difference between the two expenses and if the returnee still wanted to do buy back time, they could address it. Attorney Jensen thought the matter should be addressed and clarified in the Ordinance. The situation was not contemplated when it was written. Chair Athol did not believe the intention was to bar anyone from buying back time from Boynton. Attorney Jensen pointed out it was to limit the opportunity to buy the time back at a lesser expense. There was agreement this item will be put on the agenda for the next meeting. As to the two individuals, they cannot buy back time at the lesser rate. It was suggested Ms. LaDue inquire if their intention was to buy it back anyway. It would be more expensive and the Board would consider it, but it is not clear in the Ordinance and a language clarification would be needed. It was important it be clarified a returnee was buying back Boynton time or random time. D. Form 1 — Financial Statement 2012 — Filing date July 2013 This item was addressed earlier in the meeting. VIII. Pension Administrator's Report 1. Benefits as of May 1, 2013 Ms. LaDue explained the report showed the benefits paid so far this plan year. She explained in the first week in June, she would distribute the 185 excess money which 17 Meeting Minutes Police Pension Board Boynton Beach, FL May 14, 2013 will be a smaller amount than last year. This year they would be paying out approximately $15,000. IX. Comments None. X. 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CD -E, N c E _ a C . .= aS a) 2 0 — ct 1 ,‹ (0 c – _ _ C M a C -71) A A t wo P Barbara Ladue .���G� From: John Colvard [john.colvard @tegritgroup.com] Sent: Tuesday, August 06, 2013 10:21 AM To: ladueb@bbpdpension.com Cc: Mike Spickard; Jennifer Daves; John Colvard Subject: Alerus Retirement Solutions Information Attachments: ARS Highlights - Tegrit plans.docx; Pension &Investments ranking March 2013.pdf Importance: High Follow Up Flag: Follow up Flag Status: Flagged Hi Barbara, As promised, I have attached informational pieces about Alerus Financial Group (AFG) and Alerus Retirement Solutions. They are as follows: 1. Pension & Investments Ranking Alerus is Ranked 30` in the Country among its' Recordkeeping Priors (March 2013). 2. Alerus Recordkeeping Service Highlights Sheet ➢ Ability to expand /grow as Boynton Beach Firefighters Pension Plan (DROP) needs grow. ➢ A more robust participant /plan sponsor website(s) and tools. ➢ Expanded participant /plans sponsor reporting capabilities. ➢ Greater depth of staff and service personal. ➢ New bilingual capabilities and so much more. Alerus Finance Group Highlights: ➢ Alerus Financial is an independent, multibillion - dollar financial services company serving customers across the country and around the world. ➢ Since its establishment in 1933 as a national bank, Alerus has grown to offer a broad array of banking and wealth management products and services. ➢ Alerus has a long history and commitment to serving the retirement plan market, offers a wealth of expertise in the retirement industry, and operates with state - of- the -art technology. ➢ Most importantly, Alerus is dedicated to providing superior customer service. ➢ The union between Tegrit and Alerus is a good fit. We share a client- centric focus and are mutually committed to meeting your retirement plan needs. 1 Y Here = s ou recent a n- rru -a-E ke www. alerusfina 1. Click on the "About Alerus" tab. 2. Select "Investor relations and corporate governance ". 3. Then click on "2012 Annual Report & Financial Report ". ➢ The Alerus Retirement Solutions, a division of AFG, will be handling Dixie Metal's day - to -day recordkeeping functions. To preview the Retirement Solution's website please clink in the link below: 1. www .alerusretirementsolutions.com. If you have any questions please give me a call. Warm Regards, John JOHN COLVARD. c'RSP Director, Recordkeeping Services Tegrit Group 364 South Pine Street, Suite .A.209 Spartanburg, SC 29302 (p) 864.699.6918 (c) 740.281.8010 ! www.tegritgroup.com The information contained in this transmission may contain privileged and confidential information and is intended only for the use of the person(s) named above. If you are not the intended recipient, or an employee or agent responsible for delivering this message to the intended recipient, any review, dissemination, distribution or duplication of this communication is strictly prohibited. If you are not the intended recipient, please contact the sender immediately by reply e-mail and destroy all copies of the original message. 2 ALERUS RETIREMENT SOLUTIONS introducing new iqaftcres for T=egrit cliervts and participants... Lail Center Experienced, full time, dedicated staff Toll -free access Coverage from 8am to 7pm Eastern Time Recorded lines Translation services via a multi - lingual service center, supporting over 150 languages Participant Statement" At- a- glance account summary Personal rate of return for the reporting period, and YTD Message board for general and plan specific notices Age- specific news articles Investment election for future deposits, including pie chart Automated account realignment instruction, including pie chart Period -to -date, and year -to -date contribution summary, by source Loan summary (if applicable) Beginning and ending price per share, by fund List fund type (asset category) in various sections Disclose current Expense Ratio by fund Provide comparative benchmark returns Participant Website Balances by asset class 'As of' date balances Fund fact sheets e -mail chat ... app, available for both Online loans (if allowed in plan) iPhohe ar4d .H.droid devices More financial calculators Custom date Personal Rate of Return Market information tab Acknowledge Prospectus on transactions Online investment guidance via MasteryPoint GuidancePlus! Sample login to view Participant Website: www .alerusretirementsolutions.com User Id: demo Password: 4455 Sponsor Website - "Plan Gateway" °As of' date balances Participant distribution information (where check was sent, taxes, loan defaults, etc.) Participant loan information screen Export data to customizable spreadsheet Ability to go to Participant website to see exactly what the participant sees Indicative data changes for participants (addresses, hire date, birth date, date of term, etc,) Ability to display company logo Sample login to view Plan Gateway: www .alerusretirementsolutions.com User Id: Alerus Password: 123456 Reprinted with permission from - March 4, 2013 Plonline.com 1 t Penslons THE- NTERNATIQNAi. NEWSPAPER ral 'OF MONEY'MANAGEMEN4 „ _ , , SPECIAL REPORT .,DC RECORD KEEP . . DC record keepers ranked DC record keepers ranked by participants by number of sponsors U.S. DC plan participants under record keeping, as of Sept. 30. U.S. DC plan sponsors under record keeping, as of Sept. 30. Rank Record keeper Sponsors Rank Record keeper Sponsors ' Rank Record keeper Participants Rank Record keeper Participants 1 Paychex 60,000 30 Alerus Financial 2,500 k 1 Fidelity investments 15,818,719. 30 MUUman 623,459 2 ING U.S. Retirement 47,988 31 Securfan Retirement 2,441 t! 2 Aon Hewitt* 5,432,125 31 BMO Retirement 524,300 3 John Hancock Financial 44,657 32 Diversified 2,422 3 ING U.S. Retirement 5,134,432 32 Alliance Benefit Group 515,949 4 Nationwide Financial 41,156 33 Lincoln Trust 2,294: 4 Great West Retirement 4,583,628 33 American United Life 514,357 5 BofA Merrill Lynch* 40,506 34 Newport Group 2,210 c 5 TIAA -CREF 3,919,166 34 Standard Insurance 504,306 8 AXA Equitable Ufe 35,264 35 Vanguard Group 1,929 6 Vanguard Group 3,556,188 35 Newport Group 422,050 7 ADP Retirement 35,213 36 New York Ufe Inv. Mgmt. 1,732 3 7 Principal Financial 3,342,215 36 CPI Qualified 348,460 8 Hartford Financial 32,403 37 EPIC Advisors 1,457 8 BofA Merrill Lynch* 3,339,002 37 BOK Financial 275,026 s Principal Financial 30,798 38 DaityAccess 1,210 9 Wells Fargo 2,946,317 38 PNC Institutional 204,020 10 Fidelity Investments 28,491 39 BB&T Retirement 1,190 , 10 Nationwide Financial 2,481,937 39 Securlan Retirement 200,307 11 VAUC 27,479 4o Charles Schwab 1,170 ,; 11 Xerox 2,448,350 40 VSI Consulting Group 199,726 12 Ascensus 27,392 41. Correll 1,014 ,' 12 Prudential Financial 2,237,418 41 Security Benefit 190,382 13 Great -West Retirement 26,447 42 Milliman 815 ` 13 J.P. Morgan Retirement 2,082,790 142 Alerus Financial 180,143 14 TIAA-CREF 24,106 43 BMO Retirement 806 � 14 T. Rowe Price Group 2,072,221 43 BB&T Retirement 158,262 15 Uncoln Financial 22,831 44 SunTrust Banks 768 15 VAUC 2,0 05,342 44 Dal lyAccess 137,088 16 Transamerica Retirement 17,776 45 LP. Morgan Retirement 651 r 16 Diversified 1,704,587 45 Pentegra 135,321 17 Security Benefit 11,545 46 PNC Institutional 617 17 John Hancock Financial 1,681,339 46 Ameritas Retirement 108,462 1a American United Life 9,811 1 47 USI Consulting Group 441 18 Ascensus 1,481,7051 47 EPIC Advisors 106,360 19 CPI Qualified 7,020 48 BOK Financial 395 19 Hartford Financial 1,476,573 48 SunTrust Banks 90,164 20 ICMA Retirement 6,933 49 Aon Hewitt* 262 20 Un coln Financial 1,378,208 49 Insperity 87,617 21 Alliance Benefit Group 6,221 50 Mercer 261 21 ADP Retirement 1,349,691 50 Correll 57,300 22 MassMutual Financial 6,094 51 City National Bank 227 22 Charles Schwab 1,303,836 51 City National Bank 36,441 23 WeUs Fargo 5,260 52 Xerox 189 ; 23 MassMutual Financial 1,260,342 52 Uncoln Trust 33,142 24 Prudential Financial 3,998 53 Reed - Ramsey 152 24 Mercer 1,230,299 53 Buck Consultants 16,390 25 Ameritas Retirement 3,354 54 InvesTrust 41 25 New York Life inv. Mgmt. 997,787 54 Reed - Ramsey 13,800 26 T. Rowe Price Group 3,310 ss Buck Consultants 8 ; 26 ICMA Retirement 923,751 55 InvesTrust 8,400 27 Standard Insurance 3,257 i 56 GAMCO Investors 5 27 AXA Equitable Ufe 826,204 ss GAMCO investors 171 26 Insperlty 3,256 j Total 642,336 , 28 Payche 730,000 Total 84,093,809 29 Pentegra 2,563 k As of Dec 31 29 Transamerica Retirement 658,234 *As of Dec 31 The Publisher's sale of this reprint does not constitute or imply any endorsement or sponsorship of any product, service or organization. Crain Communications 732.723.0569. DO NOT EDIT OR ALTER REPRINTS. REPRODUCTIONS ARE NOT PERMUTED. #4372 C Entire Contents copyright by Crain Communications Inc. 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Keep enacted pension reforms in place — Changes since 2008? - Collect the actuarially required contribution (ARC) in full, every year Look into optional DC component of roll over into DB plan for annuity purchases. Newly enacted IRS rules ? ?? Efforts to constrain / reduce liability growth Strategic plan for pension plans. Adopt and implement framework for plan's direction AKA — "Strategic Plan" (Lowering UAAL or increase funded ratio through outlined strategic steps) Pensionomics — Understand and be able to explain to the plan sponsors the benefits of pensions to the economy Economic forecast Optimistic outlook "age of prosperity" for the next 10-15 years Increase of working age population and skilled workers U.S. working towards energy independence and exporting energies Equities more desirable — Bonds limited with options Emerging markets present opportunities 6.5 % — 7.0% expected rate of return is more reasonable outlook in the future despite the 8.0% historical expected rate of return Infrastructure investments Options to plan? Asset class offered by Russell? If so, what percentage of the plan could be used? Upside: Inflation opportunities related to increased value Long term investments 30-40 years, relatively stable, correlated to inflation Returns? Inflation adds to value Asset offers current cash flow 6-9% (income component) Offers a low correlation to other asset classes "Morgan fund" A fund which provides an opportunity for smaller U.S. funds to participate in infrastructure plans Future of retirement security 3% of private sector employees have DB plans as of 2011 5% of private sector employees were in a union as of 2011 23% of private sector employees had a DV plan as of 1979 20% of private sector employees were in a union as of 1979 Correlations between unionized employees and benefits Request that your money managers / consultants to support and advocate "DB" plans. They accept plan assets therefore they should support the plans themselves Four steps - Education of trustees - Adoption of active ownership policy - Insuring money managers and consultants consider issues before manger selections - Direct money managers and consultants as opposed to the other way around Advocate for retirement security to plan sponser How do we transform the way people think, talk, and act about pensions? Public perceptions: Pension plans are poorly managed, public employees benefits are overly generous, taxpayers are facing a huge tax increase to pay for pensions, converting to a DC plan will save money Pension policy triangle: Benefits policy, investment policy, and funding policy Four truths about pensions: A well designed and well managed DB plan is the most powerful financial took for providing individual retirement security The purpose of a pension plan is to attract and retain desirable employees No plan is perfectly designed or perfectly managed Following best practices (benefits, funding, investment, administration) is the only way to successfully design and manage a pension plan What needs to be done Explain to taxpayers how they benefit from pension plans Explain the economic benefits, not just the hiring / retention benefits Provide reasonable benefits at an "affordable cost" Operate in a way that creates confidence in the management of the plan. Share risks with the taxpayers on an equal basis Create plans that private workers can participate in Communicate transparency about risks and costs Act appropriately when problems arise (own it and fix it) Create a partnership between members, employers, and taxpayers Benefits for Employees: Professional investment, pooled investment, shared longevity risk, optional DC component Benefits to Employers: More benefit for same cost, better for recruiting and retaining Concerns for plans: Pension spiking, increasing cost, rising cost of medical expenses, unaffordable cost, lack of members contributions, poor funded ratio, members retiring with 100% or more of their salary, retirees earning more than 100k, investment performance failing to meet benchmarks, failure of a particular investment, administrative and investment cost, prior plans and neighboring plans with problems Sensible solutions Employer pension contributions that pay the full ARC, and that at least equal the normal cost Employee contributions to help share the plan cost Benefit improvements that are actuarially valued before adoption and properly funded upon adoption COLA's that are granted responsibly Anti- spiking measures that ensure actuarial integrity and transparency Economic actuarial assumptions that can reasonably be expected to be achieved long term Actuarial assumptions 8.0% EROA (expected rate of return) is in the rearview mirror. More reasonable expectations should be closer to 7.0% • 7.5% with 7.5% on the higher end Revisit actuarial assumptions rates every 5 years — best practice Experience studies subject to stricter regulations under new GASB rules. Dates for when and how it was obtained equates to greater transparency Financial wellness Post retirement health benefits Benefit design Increased employee cost sharing Changes under Federal health care reform to the City. How does that affect our plan? ? ?? The percentage of agencies that provide subsidized, uncapped post retirement healthcare coverage is 33- 47% Average funded ratio of plans today is 75% Average cost of pension to local budgets is 4.6% Disability insurance — Availability to plans ? ? ?? Disaster planning Compile a check list for an in case of a disaster How is our plan prepared to deal with a disaster? Considerations: payments to retirees, access to checks, access to funds, records backed up / archieved. Tech Services for system's normal operation? op * 00E - 4047 1 mf- 4t BOYNTON BEACH POLICE OFFICERS' PENSION FUND STATEMENT OF POLICY FOR TRUSTEE EXPENSES WHEREAS, the Trustees of the Boynton Beach Police Officers' Pension Fund ( "Trustees ") attend conferences, seminars, and meetings ( "conferences ") and otherwise engage in services necessary to perform their duties for the Boynton Beach Police Officers' Pension Fund ( "Plan "); and WHEREAS, the Trustees desire to adopt a Statement of Policy regarding Trustee conference expenses consistent with their fiduciary duties and all applicable laws; NOW, THEREFORE, it is hereby resolved that the following Statement of Policy Regarding Trustee Expenses is hereby adopted. I. GENERAL CONSIDERATIONS A. A Trustee shall be reimbursed only for expenses properly and actually incurred in the performance of his or her duties with the Plan. B. A Trustee shall not be reimbursed for any expenses for which he or she had been paid or is due payment from any other source. A Trustee shall not be reimbursed for any expenses which would result in double payment. C. Trustee expenses shall be reasonable in amount and necessarily incurred, taking into account the area of the country where the expense is incurred and the standards for business expenses allowable by the Internal Revenue Code. 1 D. The Board of Trustees shall approve all reimbursements for expenses in accordance with this Statement of Policy. E. This Statement of Policy shall be interpreted in accordance with the provisions of Fla. Stat. §112.061, the Internal Revenue Code and City of Boynton Beach Code of Ordinances, Article I, Section 2 -15. F. Trustees are encouraged to attend pension conferences sponsored by NCPERS, FPPTA, the State of Florida, Frank Russell Company, NAPO, attendance at training with Opal Finance, and FPPTA approved outside continuing educational conferences such as NPEA and International Foundation of Employee Benefit Plans. Trustees' attendance at these conferences do not require prior approval. All other conferences require prior approval of the Board of Trustees II. TRAVEL EXPENSES Trustees are entitled to payment for the actual costs incurred for: A. Air: Tourist Class airfare. B. Personal Car. Miles traveled times fifty -eight and one -half cents ($0.585) per mile, or the IRS standard mileage rate, whichever is greater, subject to the maximum payable if the Trustee could have traveled by air. If more than one Trustee travels in the same car, reimbursement shall be made to the Trustee who incurs the expense. C. Other Means of Travel: Actual cost incurred on a common carrier, subject to the maximum payable if the Trustee could have traveled by air. 2 D. Rental Cars: Actual cost incurred for car rental plus reimbursement for gas expenditures, subject to the maximum payable if the Trustee could have traveled by air. No travel expenses shall be allowed if the Trustee is transported without charge. III. LODGING EXPENSES Trustees are entitled to reimbursement for actual costs incurred for lodging based on a single occupancy rate. IV. FOOD EXPENSE Trustees are entitled to reimbursement for actual costs incurred subject to the maximum amount allowable by City of Boynton Beach Code of Ordinances Article I, Section 2 -15. Breakfast - $ 8.00 Lunch - $12.00 Dinner - $20.00 V. OTHER EXPENSES A. Trustees are entitled to reimbursement for actual costs incurred for taxi, ferry fares, bridge, road and tunnel tolls, storage or parking fees and communication expense. B. Trustees may be reimbursed for other expenses which are not specifically authorized by approval of the Board of Trustees. VI. PER DIEM In lieu of all other payment for subsistence (including Lodging, Food and Other Expenses), a Trustee traveling ovemight shall be entitled to receive $50.00 per diem, plus Travel and Conference Expenses. If travel is ovemight but less than 24 hours, then $12.50 3 shall be paid for each six (6) hours, or fraction thereof, of the day, measured from midnight to midnight. VII. CONFERENCE EXPENSES Convention registration fees and other actual and necessary fees for attending events which are not included in a basic registration fee, such as banquets are reimburs- able. If meals or lodging are included in the registration fee, the Trustee will not be entitled to be reimbursed for such expenses separately, and the per diem shall be reduced. VIII. DAYS FOR WHICH REIMBURSEMENT IS PAYABLE A. A Trustee shall be entitled to reimbursement while attending any conference and for direct travel to and from the point of origin and the point of destination, not to exceed one day of travel each way before and after the conference, unless it is not practical to complete the travel in one day. B. A Trustee shall not be entitled to any expense incurred as a result of any trips or personal expenditures outside the scope of his or her direct travel route on behalf of the Plan. IX. ACCOUNTING FOR EXPENSES A. A Trustee must submit an expense voucher for all expenses incurred, including per diem, within thirty (30) days after incurring the expense, on a form approved by the Board of Trustees. The approved Trustee Expense Voucher form is attached hereto. A copy of the Program or Agenda of the conference must be attached to the completed Trustee Expenses Voucher. B. Except for reimbursement for per diem, a Trustee must attach invoices, receipts or other written documentation to the completed Trustee Expense Voucher. 4 Receipts are required for each expense in excess of $25.00. If any receipt includes amounts not subject to reimbursement (e.g., for a Trustee's spouse), the receipt should so indicate and be reduced accordingly. C. For any conference where a certificate of attendance is issued, a Trustee must earn such a certificate in order to be reimbursed for expenses, unless the Trustee's absence is the result of illness or other good cause. D. The Certified Public Accountant for the Plan shall audit all Trustees expenses on an annual basis. The Certified Public Accountant shall notify the Board of Trustees if any expenses for Trustees do not comply with this Statement of Policy regarding Trustee Expenses. X. ADVANCES A. A Trustee may receive an advance to cover the expenses to be properly and actually incurred in the immediate future. However, a copy of the Program or Agenda for the conference must be provided before the advance is paid, itemizing the registration fee and any meals or lodging included in the registration fee. B. A Trustee shall promptly return to the Plan any amount advanced which exceeds the expenses incurred. C. A Trustee shall be entitled to reimbursement for expenses incurred in excess of the advance, but consistent with this Statement of Policy, and subject to approval by the Trustees. XI. DIRECT PAYMENT OF EXPENSES The Fund's Administrative Manager is authorized to make direct payment of conference, lodging and transportation fees on behalf of a Trustee. 5 THIS STATEMENT OF POLICY REGARDING TRUSTEE EXPENSES is adopted effective , 2013, by the Trustees of the Boynton Beach Police Officers' Pension Fund this day of , 2010. TRUSTEES Witnessed by: BSJ /pah - August 9, 2013 H \BB Police 0188 \Policies \EXP\2013 EXP POLICY wpd 6 The City of Boynton Beach 100 E. Boynton Beach Boulevard P.O. Box 310 Boynton Beach, Florida 33425-0310 Human Resources/Benefits: (561) 742-6275 FAX' (561) 742-6274 IMPORTANT PLAN CHANGE To: All Eligible Retirees NEW VISION INSURANCE PROVIDER From: Patricia Sholos, PHIL VSP CHOICE PLAN Benefits Administrator EFFECTIVE 10/1/13 Date: August 7, 2013 www.vsp.com Re: 2013/2014 INSURANCE PLAN YEAR Although the City's claims experience continues to run high, CIGNA offered the City a renewal rate of 10.86%. Therefore, the City is remaining with the CIGNA Open Access Plan for our medical coverage. There are no plan changes, and the CIGNA Open Access plan continues to include adult wellness benefits and unlimited lifetime benefits. Members will continue to be able to save out -of- pocket expenses by utilizing in- network providers; however, members will be able to go out -of- network if they choose. The MetLife Dental plan will continue to provide the same benefits with no changes. The City's dental premium rates have remained the same for the last two plan years. MetLife's initial renewal offer for the coming plan year was 14.4 %; however, through negotiations, the finalized increase is 7%. The City's vision carrier will be changing to the VSP Choice Plan, effective October 1, 2013. The City was required to go out to bid our vision plan. We received responses from six carriers including Humana. Humana offered a renewal with no premium increase. However, VSP offered an almost 25% decrease in rates with the same or increased in- network and non - network benefits. Most of the independent eye care providers utilized by City members are in- network with VSP. However, there are some nationwide providers that are not currently in- network. This could change in the future. As you may recall, nationwide providers such as Target Optical, Lenscrafters, Sears were not initially in- network with Humana, but were added later. Enrollment for the VSP Choice vision plan will be automatic for you and any dependents currently enrolled in the Humana plan. You will need to complete a VSP Choice vision change form only if you are deleting or adding dependents. To check for plan information and in- network providers, please login to: • The CIGNA Open Access medical website at www.Cigna.com • The MetLife dental website at www metlife.com /mvbenefits • The VSP Choice vision plan website at www. m This year's open enrollment period is scheduled through September 30, 2013. The effective date of all coverage and premium changes will be October 1, 2013. The Open Enrollment Kickoff will be held in the Library Program room on: Tuesday, August 13 9:30 a.m. — 5:00 p.m. Wednesday, August 14 9:30 a.m. — 5:00 p.m. Insurance carrier representatives will be onsite to answer questions and assist members with changes. If you need to make changes and are unable to attend either of these days, please contact Patricia Sholos, Benefits Administrator, at 742 -6278. You do not need to complete any forms if you are not making changes. CIGNA OPEN ACCESS PLAN COSTS You are not eligible to enroll if you are not currently enrolled in the City's Cgna Open Access Plan MONTHLY PREMIUM FOR CIGNA MEDICAL COVERAGE 2013/2014 Retiree only $732.62 Retiree & Spouse $1,421.28 Retiree & Child(ren) $1,318.72 Retiree/Spouse/Child(ren) $1,633.74 METLIFE DENTAL PLAN COSTS You are not eligible to enroll if you are not currently enrolled in the City's MetLife Dental plan. MONTHLY PREMIUM FOR METLIFE DENTAL COVERAGE 2013/2014 Retiree only $29.48 Family $82.45 VSP CHOICE VISION PLAN COSTS You are not eligible to enroll if you are not currently enrolled in the City's Humana Vision plan. MONTHLY PREMIUM FOR VSP CHOICE VISION PLAN 2013/2014 Retiree only $3.50 Family $10.66 DEPENDENT COVERAGE CHANGES If you are adding dependents to your medical, dental or vision plans, please be sure to have the following information with you for each dependent to be covered: Full Name, Social Security Number and Birth Date You will be required to sign an affidavit of dependency and will also need the following original documents for verification purposes: Marriage Certificate, children's Birth Certificate, or 1' page of current Tax return listing your dependents If you have additional questions about any of our City benefits, please contact Patricia Sholos in Human Resources at (561) 742 -6278 for assistance. 2013 - 2014 RETIREE INSURANCE PREMIUM RATES CIGNA MEDICAL Rates (Per Month) 01_ 1) EE 732.62 k. e � E +SP 1421.28 /0 € 1 E +CH 1318.72 //87 4.9' Family 1633.74 /' 7 7a METLIFE DENTAL c'L Q Rates (Per Month) Retiree only 29.48 a2 7 6. 1 Family 82.45 77 6 VSP CHOICE VISION PLAN oL l) /gyp) Rates (Per Month) 3?Y Retiree only 3.50 Family 10.66 /6 S/HR/Benefits/Health Plans/2013 - 2014 Retiree Insurance Rates doc 0OC3° 1 Consumer's Certificate cate of Exemption 1 R DE tttMtENT issued Pursuant to Chapter 212, Florida Statutes 10b32/08 OF REVENUE 85- 8014927816C-1 09125/2008 09/30/2013 MUNICIPAL GOVERNMENT Certificate Number Effective Date Expiration Date - Exemption Category This certifies that BOYNTON BEACH MUNICIPAL POLICE OFFICERS RETIREMENT TRUST FUND 100 E BOYNTON BEACH BLVD BOYNTON BEACH FL 33435 -3838 • is exempt from the payment of Florida sales and use tax on real property rented, transient rental - property rented, tangible personal property purchased or rented, or services purchased. l Important Information for Exempt Organizations R DEPARTMRI4T OF REVENUE 1. You must provide all vendors and suppliers with an exemption certificate before making tax- exempt purchases. See Rule 12A- 1.038, Florida Administrative Code (FAC). 2. Your Consumer's Certificate of Exemption is to be used solely by your organization for your organization's customary nonprofit activities. 3. Purchases made by an individual on behalf of the organization are taxable, even If the individual will be reimbursed by the organization. 4. This exemption apps only to purchases your organization makes. The sale or lease to others by your organization of tangible personal property, sleeping accommodatlons or other real property is taxable. Your organization must register, and collect and remit sales and use tax on such taxable transactions. Note: Churches are exempt from this requirement except when they are the lessor of real property (Rule 12A- 1.070. FAC). 5. It is a criminal offense to fraudulently present this certificate to evade the payment of sales tax. Under no circumstances should this certificate be used for the personal benefit of any individual. Violators will be liable for payment of the sales tax plus a penalty of 200% of the tax, and may be subject to conviction of a third degree felony. Any violation will necessitate the revocation of this certificate. 6. If you have questions regarding your exemption certificate, please contact the Exemption Unit of Central Registration at 850 -487 -4130. The mailing address is PO BOX 6480, Tallahassee, FL 32314 -6480- Barbara Ladue From: Bonni S. Jensen [bsjensen@perryjensenlaw.com] Sent: Thursday, August 01, 2013 11:59 AM To: Julie Klahr Cc: THEPENSIONTEAM @PERRYJENSENLAW.COM; 'Athol, Toby'; 'Caudell, Scott; Barbara Ladue Subject: Boynton Beach Police Pension Fund - Amendment to Plan for SB 1128 Attachments: Definition of Compensation or salary.pdf Julie, What is the status of the attached amendment? Has the new collective bargaining agreement been entered into? To make sure that your email is handled in a timely manner, please copy thepensionteamAperrylensenlaw corn Bonni S. Jensen The Law Offices of Perry & Jensen 400 Executive Center Drive, #207 West Palm Beach, Florida 33401 Telephone: 561 - 686 -6550 Fax: 561- 686 -2802 bslensenperryiensenlaw corn CONFIDENTIALITY NOTICE: This communication is confidential, may be privileged and is meant only for the intended recipient. If you are not the intended recipient, please notify the sender ASAP and delete this message from your system. IRS CIRCULAR 230 NOTICE: To the extent that this message or any attachment concerns tax matters, it is not intended to be used and cannot be used by a taxpayer for the purpose of avoiding penalties that may be imposed by law. 1 ORDINANCE , 2013 AN ORDINANCE OF THE CITY OF BOYNTON BEACH, FLORIDA, AMENDING ARTICLE III, OF CHAPTER 18 OF THE BOYNTON BEACH CODE OF ORDINANCES, ENTITLED "MUNICIPAL POLICE OFFICERS' RETIREMENT TRUST FUND;" AMENDING SECTION 18 -172 PROVIDING FOR BUY BACK OF SERVICE; AMENDING SECTION 18 -175 PROVIDING FOR DEFERRED RETIREMENT OPTION PLAN; PROVIDING FOR CODIFICATION; PROVIDING FOR CONFLICT; PROVIDING FOR SEVERABILITY; AND, PROVIDING FOR AN EFFECTIVE DATE HEREOF. WHEREAS, the Boynton Beach Police Officers' Pension Fund Plan Document ( "Plan) permits members to purchase years of service in the Plan for which the member was previously employed as a police officer with the City of Boynton Beach ( "City ") and withdrew those contributions by repaying the Fund for the contributions that were withdrawn in a lump sum; WHEREAS, the Board of Trustees of the Boynton Beach Police Officers Pension Fund ( "Fund ") recommends an amendment to the Plan to allow members to repay the withdrawn contributions over time with interest rather than in a lump sum; and fied pension plans to provide certain benefits; and WHEREAS, the City Commission of the City of Boynton Beach, Florida, desires to revise its Police Officers' Plan in order to provide this administrative change; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF BOYNTON BEACH, FLORIDA: Section 1. The foregoing "WHEREAS" clauses are hereby certified as being true and correct and are incorporated herein by this reference. Section 2. The definition of "Compensation or Salary" contained in Section 18- 165 of Article III of Chapter 18 of the Boynton Beach Code of Ordinances is hereby Page 1 of 5 Ordinance , 2013 amended as follows: Sec. 18 -165. Definitions. (a) The following words or phrases, as used in this article, shall have the following meaning: * * * Compensation or salary. The total cash remuneration including lump sum payments for accumulated sick and vacation leave and "overtime" paid by the primary employer to a police officer for services rendered, but not including any payments for extra duty or a special detail work performed on behalf of a second party employer paid directly to the police officer by the second party employer and amounts paid to a police officer after December 31, 2008 as differential wages during any period of active duty military service lasting more than 30 days. This definition also excludes severance pay and other similar payments which are not for services rendered. The member's compensation or salary contributed as employee- elective salary reductions or deferrals to any salary reduction, deferred compensation, or tax - sheltered annuity program authorized under the Internal Revenue Code shall be deemed to be the compensation or salary the member would receive if he or she were not participating in such program and shall be treated as compensation for retirement purposes under this article. Effective insert effective da e overtime included in earnable com • ensation Page 2 of 5 Ordinance , 2013 is limited to 300 hours per Member per year. Prior to [insert effective date] all overtime is included in the definition of earnable com • ensation can be sala or com • - nsation or earnin s . No hours of unused accumulated sick and vacation leave earned after [insert effective date] shall be considered earnable compensation. however. members may include all hours earned as of [insert day before effective date] provided that amount of hours is cashed in at retirement. For any person who first becomes a member in any Plan year beginning on or after January 1, 1996, compensation for any Plan year shall not include any amounts in excess of section 401(a)(17) of the Internal Revenue Code limitation (as amended by the Omnibus Budget Reconciliation Act of 1993), which limitation of $150,000 shall be adjusted as required by federal law for qualified government plans and shall be further adjusted for changes in the cost of living in the manner provided by section 401(a)(17)(B) of the Internal Revenue Code. For any person who first became a member prior to the first plan year beginning on or after January 1, 1996, the limitation on compensation shall be not less than the maximum compensation amount that was allowed to be taken into account under the plan as in effect on July 1, 1993, which limitation shall be adjusted for changes in the cost of living since 1989 in the manner provided by section 401(a)(17) of the Internal Revenue Code. F.S. Ch. 185. Page 3 of 5 Ordinance , 2013 Section 3. It is the intention of the City Commission of the City of Boynton Beach that the provisions of this Ordinance shall become and be made a part of the Code of Ordinances of the City of Boynton Beach, Florida. The Sections of this ordinance may be renumbered, re- lettered and the word "Ordinance" may be changed to "Section," "Article" or such other word or phrase in order to accomplish such intention. Section 4. All Ordinances or parts of Ordinances, Resolutions or parts of Resolutions in conflict herewith be and the same are hereby repealed to the extent of such conflict. Section 5. If any clause, section, or other part or application of this Ordinance shall be held by any court of competent jurisdiction to be unconstitutional or invalid, such unconstitutional or invalid part or application shall be considered as eliminated and so not effecting the validity of the remaining portions or applications remaining in full force and effect. Section 6. This Ordinance shall become effective upon passage except as otherwise provided herein. FIRST READING THIS DAY OF , 2013. SECOND, FINAL READING and PASSAGE THIS DAY OF , 2013. PASSED AND ADOPTED THIS DAY OF , 2013. CITY OF BOYNTON BEACH, FLORIDA Page 4 of 5 Ordinance , 2013 Mayor Vice Mayor Commissioner Commissioner Commissioner ATTEST: CITY CLERK H: \BB Police 0188 \Plan Doc\Amend\2013 \Definition of Compensation or salary.wpd Page 5 of 5 Barbara Ladue From: Pete.Strong@gabrielroeder.com Sent: Thursday, August 01, 2013 2:33 PM To: bsjensen @perryjensenlaw.com Cc: ThePensionTeam @perryjensenlaw com; ladueb @bbpdpension.com; AtholT @bbfl.us Subject: RE Boynton Beach Police Pension Fund - Rehired Officer With Existing Def Vested Benefit Thanks Bonni! Under this version, I believe Mr. Hanning's normal retirement date would no longer be 7/1/2017 for any part of his benefit... combining service together from both periods of employment would give him around 10.3 years of service as of right now. His new normal retirement date for his entire benefit would then be the first to occur of 55&10, 50 &15, or 20 years of service, which would be 50 &15, so his revised normal retirement date would be 5/1/2020 (attainment of age 50 with —17 years of service). The other option would be the first version you drafted, which would preserve his original deferred benefit payable at 7/1/2017. -Pete From: Bonni S. Jensen [mailto :bsjensen @perryjensenlaw.com] Sent: Thursday, August 01, 2013 2:05 PM To: Strong, Pete (FLP1) Cc: ThePensionTeam @perryjensenlaw.com; ladueb @bbpdpension.com; AthoIT @bbfl.us Subject: RE: Boynton Beach Police Pension Fund - Rehired Officer With Existing Def Vested Benefit Pete, I had also drafted the following: Re- employment of terminated vested persons (Sec. 18- 169(e)(2) or (3)). Re- employed terminated vested persons shall have the years of service for the second period of employment added to the first period of service and benefits shall be calculated based upon Sec. 18- 169(a)(2) using the total number of years of service for all periods, average final compensation at time of termination of the second period of service for all years of service. Additionally, the multiplier used shall be the multiplier in effect for each year of service. 1 was aware that his first vested benefit would be payable in 2017 and cautioned that in order to collect he would have to quit as the pension plan is worded now. Additionally, I wanted to make sure that these individuals were treated fairly but equal to the members who stayed in service to retirement and that they were not going to benefit by leaving and coming. To make sure that your email is handled in a timely manner, please copy thepensionteam( iperrylensenlaw .com Bonni S. Jensen The Law Offices of Perry & Jensen 400 Executive Center Drive, #207 West Palm Beach, Florida 33401 1 Telephone: 561 - 686 -6550 Fax: 561- 686 -2802 bsjensen CONFIDENTIALITY NOTICE: This communication is confidential, may be privileged and is meant only for the intended recipient. If you are not the intended recipient, please notify the sender ASAP and delete this message from your system. IRS CIRCULAR 230 NOTICE: To the extent that this message or any attachment concerns tax matters, it is not intended to be used and cannot be used by a taxpayer for the purpose of avoiding penalties that may be imposed by law. From: Pete.Strong(agabrielroeder.com [mailto: Pete .Strong(aaabrielroeder.com] Sent: Thursday, August 01, 2013 1:41 PM To: bsjensen(Tperrbensenlaw.com Cc: ThePensionTeam@ perryjensenlaw.com; IaduebObbpdpension.com; AtholTObbfl.us Subject: RE: Boynton Beach Police Pension Fund - Rehired Officer With Existing Def Vested Benefit Hi Bonni, This policy would be the least expensive and most straight - forward policy for the Pension Fund, but I have a few questions / comments... Was any consideration given to using the 3% multiplier for the first period of service, but basing that benefit on AFC at retirement rather than AFC at the end of the first period of service (as Steve Palmquist suggested in his 6/18/2012 email)? Regarding vesting, I think it would be more fair to members to consider members who have a vested deferred benefit (by virtue of having completed at least 5 years of service and leaving their employee contributions in the Fund) from their first period of service to he immediately 100% vested in their second period of service - without needing to satisfy an additional vesting requirement. That is how vesting is handled for rehires in the private sector under ERISA. Thoughts? Also, due to the imputed service rule (the date he would have completed 20 years of service), the normal retirement date applicable to his first period of service (7/1/2017) is different than the normal retirement date that will be applicable to his second period of service. This will always be an issue for re- employed members when you have an imputed service provision for determining the normal retirement date for vested deferred members. For Mr. I Ianning, the normal retirement date for his second period of service will be 5/1/2025 (55 &10). Early retirement with reduction is available at age 50 (which would be 5/1/2020), but 10 years of service is required, so that brings up another question — could prior service count towards eligibility for early retirement? 'Thanks! -Pete Strong 2 Peter N. Strong, ASA, EA, FCA, MAAA Consultant and Actuary Gabriel, Roeder, Smith & Company One East Broward Boulevard ,.a► Suite 505 Fort Lauderdale, FL 33301 -1804 Telephone: (954) 527 -1616 (ext 2102) 'weir ' Direct. (954) 713 -2102 Fax: (954) 525 -0083 pete.strong(c gabrielroeder.com Circular 230 ;Notice Pur.noant 10 regulations issued 13 the IRS, to the extent this communication (or any attachment) concerns tax matter s, rt is not mended or written to be used and cannot be used, jor the purpose of (r) avoiding tax- related penalties under the Internal Revenue Code or (u) marketing or recommending to another party anv tax - related matter addressed within Each taxper)•er should seek advice based on the individual's circumstances from an independent tax advisor the above communication shall not be construed to provide tar advice, legal advice or miestmenl advice ,Notice of Corfdentrahty Ihts transmission contains information that may be confidential and that mai also be prrvtleged Unless you are the intended recipient of the message (or authorised to receive it for the intended recipient), you mat not copy,,forw aid, or nthen! use use it, or disclose its contents to anyone else If you have received this transmission nn error. please note• the sender immedrateh' and delete it from your system Please consider the environment before printing this e-mail. From: Bonni S. Jensen [ mailto :bsjensenOperryjensenlaw.com] Sent: Thursday, August 01, 2013 12:40 PM To: Strong, Pete (FLP1) Cc: ThePensionTeam(aperrvjensenlaw .com; 'Barbara Ladue'; 'Athol, Toby' Subject: Boynton Beach Police Pension Fund - Rehired Officer With Existing Def Vested Benefit Pete, The Board of Trustees of the Boynton Beach Police Pension Fund have a member who was terminated vested and then returned to work. His first period of service was at a 3% multiplier and his second will be at the 3.5% multiplier. Attached is some email correspondence on this matter and below is a draft policy interpreting the rehire situation. Let me know what you think. Re- employment of terminated vested persons (Sec. 18- 169(e)(2) or (3)). Re- employed terminated vested persons shall be deemed a new employee subject to any vesting and contribution requirements and the additional credited service accrued during the subsequent employment period shall be used in computing a second benefit amount attributable to the subsequent employment period, which benefit amount shall be added to the benefit determined upon the initial termination to determine the total benefit payable upon final retirement. The benefit calculated for the first term of service shall remain unchanged. To make sure that your email is handled in a timely manner, please copy thepensionteam(caperryiensenlaw .com Bonni S. Jensen The Law Offices of Perry & Jensen 400 Executive Center Drive, #207 West Palm Beach, Florida 33401 Telephone. 561 - 686 -6550 3 Fax: 561 - 686 -2802 bsiensenfterryiensenlaw.com CONFIDENTIALITY NOTICE: This communication is confidential, may be privileged and is meant only for the intended recipient If you are not the intended recipient, please notify the sender ASAP and delete this message from your system. IRS CIRCULAR 230 NOTICE: To the extent that this message or any attachment concerns tax matters, it is not intended to be used and cannot be used by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Original Message Subject:Rehired Officer With Existing Def Vested Benefit Date:Wed, 15 May 2013 12:57:32 -0400 From:Barbara Ladue <ladueb @bbpdpension.com> To:< thepensionteam @perryjensenlaw.com >, "'Athol, Toby ' <AtholT @bbfl.us>, "'Caudell, Scott" <CaudellS @bbfl.us >, "'Llopis, Jason t" <LlopisJ@a bbfl.us> Attached is response, received from GRS in June 2012, regarding the handling of the rehire of an officer with an existing deferred benefit. Hope this gives direction. Thanks. Barb La Due Original Message From: Scanner [mailto:fax @compson.com] Sent: Wednesday, May 15, 2013 11:44 AM To: police and fire Subject: Send data from MFP07580425 05/15/2013 11:43 Scanned from MFP07580425 Date: 05/15/2013 11:43 Pages: 2 Resolution: 200x200 DPI 4 Barbara Ladue From: Steve. Palmquist @gabrielroeder.com Sent: Monday, June 18, 2012 9:30 AM To: bsjensen @perryjensenlaw.com; ladueb @bbpdpension.com Cc: ThePensionTeam @perryjensenlaw com; chairman @bbpdpension com; P e te. Stro n g @g a b ri e l roed a r. co m Subject: RE: Boynton Police - Rehire Officer Craig Nanning Bonni, I agree with your interpretation. Do you agree that the ultimate pension for the first period of service would be based on a 3% multiplier and AFC at retirement rather than AFC at the end of the first period of service? Circular 230 Notice Pursuant to regulations issued by the IRS, to the extent this communication (or any attachment) concerns tax matters, it is not intended or written to be used. and cannot be used, for the purpose of (i) avoiding tax - related penalties under the Internal Revenue Code or (1I) marketing or recommending to another party any tax - related matter addressed within Each taxpayer should seek advice based on the individual's circumstances from an independent tax advisor. J Stephen Palmquist, ASA, MAAA, FCA, EA Gabriel, Roeder, Smith & Company One East Broward Blvd , Suite 505 Fort Lauderdale, FL 33301 Telephone 954 - 527 -1616 Fax 954- 525 -0083 Steve palmgwst@aabnelroeder com The above communication shall not be construed to provide tax advice, legal advice or investment advice Notice of Confidentiality This transmission contains information that may be confidential and that may also be pnvileged Unless you are the intended recipient of the message (or authorized to receive it for the intended recipient), you may not copy, forward, or otherwise use It or disclose its contents to anyone else. if you have received this transmission in error, please notify the sender immediately and delete it from your system From: Bonni S. Jensen [ mailto :bsjensenOperrvjensenlaw.com] Sent: Friday, June 15, 2012 1:48 PM To: Barbara Ladue Cc: ThePensionTeam©perrvjensenlaw .com; 'Gary Chapman'; Palmquist, Steve (FLP1) Subject: Re: Boynton Police - Rehire Officer Craig Nanning Barbara, It looks like Officer Hanning would just add to his years of service. Additionally, I think that his years of service earned at 3% would remain at 3% with his future accruals eligible for the 3.5% multiplier. I have a call into Steve Palmquist's office to discuss. I have not encountered this type of situation before. I think that the multiplier should be split because he was not considered in the group of actives to receive the 3.55 multiplier on his past service. The second question is whether he could increase his multiplier on the prior 3% service to the 3.5 %. Additionally, under the plan as written, there is no ability for him to work and receive a benefit, so if he is still working in 2017 he will need quit to get his pension. I will check around and get back with you. 1 TO SEND MAIL TO MY ENTIRE TEAM, PLEASE RESPOND TO THEPENSIONTEAM @PERRYJENSENLAW.COM Bonni S. Jensen <bsiensen@perryiensenlaw.com> Law Offices of Perry & Jensen, LLC 400 Executive Center Drive, Suite 207 West Palm Beach, Florida 33401 Telephone: (561)686 -6550 Facsimile: (561)686 -2802 CONFIDENTIALITY NOTICE: This communication is confidential, may be privileged and is meant only for the intended recipient. If you are not the intended recipient, please notify the sender ASAP and delete this message from your system. IRS CIRCULAR 230 NOTICE: To the extent that this message or any attachment concerns tax matters, it is not intended to be used and cannot be used by a taxpayer for the purpose of avoiding penalties that may be imposed by law. On 6/14/2012 11:29 AM, Barbara Ladue wrote: Bonni: I spoke with Gary and he suggested we get your review and advice on this rehire situation before I discuss with Officer Nanning. Background: Craig Hanning had an original hire date of 6 -5 -1997 and he terminated on 5 -27 -2006 (Detective) with 8 yrs 11 mos and 22 days of service. He left his money in the Plan for a deferred vested benefit of $1725.92, Life 10C &C, set to begin 7 -1 -2017. (This benefit is based on a 3% multiplier) He has been rehired as of 3 -26 -2012 as a Police Officer. Since he did not withdraw his money (EE contributions) the 6 month re- employment rule for action does not appear to apply in his case. See attachments. Since we are in uncertain times, would an option be for Officer Hanning to leave his Deferred vested benefit as is and when July 2017 approaches and he is still an active participant of the Plan, then decide to activate the monthly benefit or add these years of service to his current rehire date? Thanks. Barb La Due From: fax@ compson.com [mailto:fax @compson.com] Sent: Thursday, June 14, 2012 11:05 AM To: ladueb @bbpdpension.com Subject: Message from KMBT C550 2 Barbara Ladue From: Bonni S. Jensen [bsjensen ©perryjensenlaw.com] Sent: Thursday, August 01, 2013 9:41 AM To: DJ &C - Jeanine Bittinger Cc: Barbara Ladue; 'Athol, Toby; 'Caudell, Scott' Subject: FW: Boynton Beach Police Attachments: 2013 -07 -24 2012 Annual Report corrections.pdf Jeanine, As a follow up to our discussions about the attached July 24, 2013 letter from the State on the Annual report, I spoke to Julie Browning about the Supplemental Plan issue addressed in the first bullet. I explained while it may be a question that should be answered the release of the state money should not be conditioned on the response. As per the below email, the Police and Fire Trust Fund's Office agreed. 1 have already discussed with Pete Strong and will be prepared to discuss with the Trustees at the August 13, 2013 meeting. Please contact me if you have any questions. To make sure that your email is handled in a timely manner, please copy thepensionteameiperrviensenlaw.com Bonni S. Jensen The Law Offices of Perry & Jensen 400 Executive Center Drive, #207 West Palm Beach, Florida 33401 Telephone: 561 - 686 -6550 Fax: 561 - 686 -2802 bsiensen4perrvjensenlaw.com CONFIDENTIALITY NOTICE: This communication is confidential, may be privileged and is meant only for the intended recipient. If you are not the intended recipient, please notify the sender ASAP and delete this message from your system. IRS CIRCULAR 230 NOTICE: To the extent that this message or any attachment concerns tax matters, it is not intended to be used and cannot be used by a taxpayer for the purpose of avoiding penalties that may be imposed by law. From: Browning, Julie [ mailto:J ulie.Browning @dms.myflorida.com] Sent: Thursday, August 01, 2013 9:24 AM To: bsjensen @perrvjensenlaw.com Subject: Boynton Beach Police Hi Bonni, I spoke with Keith regarding the supplemental benefit question and we will not hold the premium tax money. Please provide a response as soon as you receive the information. Thanks. 1 Barbara Ladue From: Barbara Ladue [ladueb @bbpdpension.com] Sent: Monday, July 29, 2013 1:48 PM To: 'Jeanine Bittinger'; 'Richard Cristini' Subject: Boynton Police - State Letter of 7 -24 -2013 "Second Request" Jeanine: This appears to be a duplicate letter of the State letter of 3 -12 -2013, my Email response( to you) of 3 -21 -2013. The State again sent letters on 3 -27, 4 -17 & now 7 -24 -2013. All these letters appear to address the same items again and again. Please advise the status on all this. Thanks. Barb La Due 1 _; °� Bureau of Local Retirement Systems 1- '' " `, FLORIDA DEPARTMENT OF MANAGEMENT SERVICES Municipal Police Officers , and Firefighters' Retirement Trust Funds Office ,L• " ,. We serve those who serve Florida P.Q. Box 3010 Tallahassee, Florida 32315 -3010 , ' — Tel: 850.922.0667 1 Fax: 850. 921.2161 1 Toil -Free: 877.738.6737 Rick Scott, Governor Craig J. Nichols, Agency Secretary July 24, 2013 SECOND NOTICE Mr. Richard A. Cristini, CPA Davidson, Jamieson & Cristini, P.L. ,; JUL 2 . 2iii3 1956 Bayshore Blvd. _ Dunedin, FL 34698 . - Dear Mr. Cristini: We have received your response to our previous correspondence regarding the 2012 Annual Report for the Boynton Beach Police Officers' Pension Fund. Based on our review of that reply, listed below are items that need corrections, clarification and /or additional information. • It has come to our attention that Section 18 -169F of the Local Plan provides a supplemental benefit to retirees using a portion of the State Premium Tax Moneys. It is unclear if this provision meets the definition of a Supplemental Plan as found in Section 185.02(15), or is simply a supplemental benefit that is provided in the base plan; Please provide an explanation of the status of this provision. Additionally, please explain how this supplemental benefit is recorded on the Annual Report and Actuarial Valuation. • Page 4, line 7 does not agree with page 8, line 5. Please revise. • Page 1 — Please verify the suite number for the address of the Chairman and Secretary. ? • Page 1 — Please verify the e-mail address for the Chairman. A • Page 3, line 6 — Please verify the suite number in the address. • Page 12 — Cecile DeMastro does not appear to be listed on the prior years' report. Please , explain. 34-v • Page 13 — Please verify the date of employment for Gerald Monroe. There appears to be a I -' typ o. • Page 13 — Please verify the date of employment for James Williams. The date appears different on page 14. • Page 14 — David A. Britto and Raymond C. Lugo don't appear to be listed on this years' report. Please explain. • Page 14 — Please verify the date of employment, years of service and date of plan entry for the following: Cory M. Herny, Stephen J. Mills, Patrick R. Roedel and Anthony S. Verrigni. • Page 14 — Thomas W. Jones is not listed on this years' report. Please verify he no longer is employed and has received all refunds due to him. • Page 15 — Please revise the top left corner of page to read "2012 ". • Page 15 — Please verify the total number of DROP members at the top of the page. • Please provide revised pages of any information that has been corrected. July 24, 2013 Richard A. Cristini Page 2 If you have any questions or need further information, please call our office at 850/922 -0667. incerely, ...- . 41 . J I= : row , : ou an u icipal Police Officers' a - fighters' Retirement Trust Funds JB:mjm Copy: Lt. Gary Chapman, Chairman Steve Palmquist, Plan Actuary Bonni Jensen, Plan Attorney Barbara Ladue, Plan Administrator E. Barrett Atwood, Sr., Finance Director THE LAW OFFICES OF PERRY & JENSEN LLC ANN H. PERRY BONNI SPATARA JENSEN aperry@perryjensenlaw.com bsjensen @perryJensenlaw.com MEMORANDUM To: Board of Trustees �{ From: Bonni S. Jensen r �J Subject: Important Pension Disclosure Amendments to Chapter 112 (SB 534) Date: June, 2013 During this year's recently completed legislative session, the Legislature considered but ultimately failed to adopt any bills amending the Florida Retirement System ( "FRS ") or municipal police and fire pension plans under Chapters 175 and 185. One pension "disclosure" bill was adopted despite the opposition of the League of Cities, labor and the Florida Public Pension Trustees Association. Senate Bill 534 ( "SB 534 "), otherwise known as Chapter 2013 -100, Laws of Florida, applies to all local government plans in Florida. SB 534 was signed by the Governor last week. In many respects SB 534 can be seen as building on prior legislation, SB 1128 from 2011, which required plans to disclose the present value of plan benefits using the FRS 7.75% assumed rate of return. SB 1128 also required the Division of retirement to create actuarial fact sheets for each local government defined benefit plan to be posted on a governmental plan sponsor's website. While the final version SB 534 was pared down to incorporate new Governmental Accounting Board Standards ( "GASB "), nevertheless, SB 534 contains significant additional disclosure requirements and substantial noncompliance penalties. The FRS is exempted from SB 534. Your actuary and I will be working on a Plan of Action to implement the requirements of SB 534. This memo is intended to highlight the primary provisions of SB 534, but is not exhaustive: • New actuarial and financial disclosure: SB 534 creates new disclosure requirements in Section 112.664, Florida Statutes, to be electronically reported to the Department 400 EXECUTIVE CENTER DRIVE, SUITE 207:. WEST PALM BEACH, FLORIDA 33401 -2922 PH: 561.686.6550 Fx: 561.686.2802 SP.YY Board of Trustees Important Pension Disclosure Amendments to Chapter 112 (SB 534) June, 2013 Page 2 of 3 of Management Services within 60 days after receipt of the certified actuarial report submitted after the close of the plan year ending on or after June 30, 2014: 1) GASB 67/68: Section 112.664(1)(a) requires preparation of annual financial statements in compliance with GASB 67 and 68, using RP -2000 Combined Healthy Participant Mortality Tables, by gender, with generational projection by Scale AA; 2) 2% lower investment assumption: Section 112.664(1)(b) requires preparation of annual financial statements using an assumed rate of return 200 basis points lower than the plan's assumed rate of retum /discount rate. Note that SB 1128's requirement from 2011 to disclose the present value of plan benefits using the FRS 7.75% assumed rate of return has been deleted. The new lower 200 basis point reporting requirement should not be confused with the plan's actual investment assumption, which serves as the basis for calculating the plan sponsor's funding obligation. Many clients are considering supplementing the new required 200 basis point calculation with yet another sensitivity disclosure using a 200 basis point higher figure as well. For example, if a plan is currently using a 7.75% investment assumption a sensitivity analysis could be performed showing the impact of both the 5.75% and 9.75% bookends around the plan's actual investment assumption; 3) & 4) Run outdate: Section 112.664(1)(c) requires reporting of a fictitious "run out date" attempting to show how long the current market value of assets can sustain the payment of expected retirement benefits based on items 1) and 2) above. Note that this projection ignores employer contributions, member contributions, assumed investment eamings and the receipt of premium taxes. 5) & 6) Alternative contributions: Section 112.664(1)(d) requires reporting of contributions to fund the plan based items 1) and 2) above, stated as an annual dollar value and a percentage of valuation payroll. The reporting of these alternative contribution values are in addition to the actual recommended contribution set forth in the plan's latest valuation. 7) 5 year historic comparison: Section 112.664(2)(b)1 requires reporting of side -by- side comparisons of the plan's assumed rate of return compared to the actual rate of return for the previous 5 years beginning 2013; 8) Portfolio construction: Section 112.664(2)(b)2 requires reporting of side -by -side comparisons of the percentages of cash, equity, bond and alternative investments in the plan's portfolio during each of the previous 5 years. Board of Trustees Important Pension Disclosure Amendments to Chapter 112 (SB 534) June, 2013 Page 3 of 3 • Requirement to post data and reports on -line: Each defined benefit retirement plan and its plan sponsor shall provide the information required in SB 534, including the plan's funded ratio, as part of the disclosure required by plan sponsors under Section 166.241(3), Florida Statutes. Additionally, disclosure is required "on any website that contains budget information relating to the plan sponsor or performance information related to the system or plan." If a plan sponsor or plan has a publicly available website, copies of the plan's most recent financial statement, actuarial valuation, and a link to the Division of Retirement's fact sheet shall be posted on the plan and plan sponsor's website. The Division of Retirement's fact sheets are expanded and shall also contain the information specified in Section 112.664(1). • Penalties for noncompliance: The Department of Management Services "may" notify the Department of Revenue and the Department of Financial Services of noncompliance, which "shall" withhold any funds not pledged for satisfaction of bond debt service and which are otherwise payable to the plan sponsor, until the required information is provided. The state is required to specify the date of the withholding 30 days in advance, to permit a request for hearing under Chapter 120, Florida Statutes. • State of Florida not liable for shortfalls: SB 534 amends Section 112.66 to clarify that the state of Florida is not liable for any obligations relating to shortfalls in any local government retirement system. SB 534 law takes effect on July 1, 2013, except as described above. Our office is available to discuss the new legislation at upcoming board meetings, along with the board's actuary and other consultants. We anticipate that guidance will be necessary from the Division of Retirement. For example, the Division of Retirement is charged with formulating a "standardized, user - friendly, and easily interpretable format" for the data required by Sections 112.664(2)(b)1 &2. Much thanks and appreciate to Adam Levinson who prepared this memorandum! H:WO MisceIIaneousAALL BOARD5120131Memo re SB 534.wpd THE LAW OFFICES OF PERRY & JENSEN, LLC ANN H. PERRY BONN! SPATARA JENSEN apeny @perryjensenlaw.com bsjensen @penyjensenlaw.com MEMORANDUM To: Board of Trustees From: Bonni S. Jensen Subject: SB 534 - Ch. 2013 -100 Date: June 5, 2013 On Friday, May 31, 2013, the Governor signed into law SB 534 providing for reporting requirements for Pension Funds. l will be communicating with your actuary to determine a Plan of Action as a result of the law and will be prepared to discuss with you at your August Quarterly meetings. In the meantime, if you have any questions, please contact me. H:1AII MiscellaneouslALL BOARDS\2013\Memo SB 534.wpd 400 EXECUTIVE CENTER DRIVE, SUITE 207: WEST PALM BEACH, FLORIDA 33401 -2922 PH: 561.686.6550 •: Fx: 561.686.2802 Idtinf\I./Ys Invoice Invoice for: Invoice Number Russell Client ID Bilking Period Ending City of Boynton Beach Police Retirement 34410 C04616001 06/30/2013 Fund Ms.Barbara S. LaDue Invoice Date Payment Terris Total Amount Due Pension Administrator 07/22/2013 Net 30 Days $ 126,061.00 ladueb @bbpdpension.com 1500 Gateway Blvd #220 Boynton Beach, FL 33426 Mail to: City of Boynton Beach Police Retirement Specify Remittance Information Fund Ms.Barbara S. LaDue ❑ Payment by check Pension Administrator Make check payable to Russell Investments ladueb @bbpdpension.com Check Amount $ 1500 Gateway Blvd #220 &EMI IMO? I , r. Aiii ❑ Request payment by Direct Debit Authorized Signer See additional instructions on reverse side Please return upper portion with your check or direct debit request The following is a summary of your account(s). For more information, please review the enclosed detail Direct Debit per Description of Service Fee Amount Standing instructions or Amount Due Payments Received Russell Investments Investment Management Fees $ 126,061.00 $ 0.00 $ 126,061.00 Current Period Fees $ 126,061.00 $ 0.00 $ 126,061.00 Balance Forward 124,775 00 (124,775.00) 0.00 Total Amount Due $ 126,061.00 Invoice - Number - -- — — Invoice Date- _ _ _Russell-Client D P__aymentlerms _ RiilingP_eriod Ending_ 34410 07/22/2013 C04616001 Net 30 Days 06/30/2013 Current Period Over 30 Days Over 60 Days Over 90 Days Total Amount Due $ 126,061.00 $ 0.00 $ 0.00 $ 0.00 $ 126,061.00 Invoice for: City of Boynton Beach Police Retirement Fund Ms.Barbara S. LaDue Pension Administrator ladueb ©bbpdpension com 1500 Gateway Blvd #220 (See reverse side for additional information) Boynton Beach, FL 33426 Invoice Invoice Number 34410 Billing Period Ending 06/30/2013 Russell Investments - FEE DETAIL Investment Management Fees City of Boynton Beach Police Retirement Fund Boynton Beach Police Officers Retirement Trust Funds Investment Account Account Number: QU7W Fund Name Average Rate% Fee Amount Market Value Russell Multi -Asset Core Fund 45,360,216 0.20000 90,720 00 Russell Multi- Manager Bond Fund 20,143,872 0 20000 40,288.00 Russell Real Estate Equity Fund 2,835,583 0.20000 5,671.00 Russell Short-Term Investment Fund 7,270 0.20000 15.00 Subtotal 68,346,941 $ 136,694.00 Russell Real Estate Equity Fund - Internal Fee Paid (10,633.00) Account Total $ 126,061.00 Total Investment Management Fees $ 126,061.00 Page 2 Russell investments MANAGER 4525 - - INVOICE NO. 1306074706 -9997 NW 6327 DATE 2013/07/25 PO BOX 1450 PAGE 1 OF 1 Minneapolis, MN 55485 -6327 US TOTAL CHARGES CURRENT PERIOD USD 1,015.34 9BYM- Police Officer Retirement Trust Police Officer Retirement Trust FOR 3 MONTH PERIOD 4/01/13 to 6/30/13 City of Boynton Beach DB Boynton Police & Fire Pension Fnds, 1500 Gateway Blvd,Suite #220Account ID: BOYNTON POLICE Pension Administrator Pay Type 3 Boynton Beach, FL 33426 ATTENTION Barbara L. Ladue PLEASE DETACH THIS PORTION AND RETURN WITH YOUR PAYMENT CHARGES BENEFIT PAYMENT CHECK FEES ACH Benefit Payments 386 AT 1.25 482.50 Benefit Payments 12 AT 1.25 15.00 Lump Sum Payments 5 AT 10.00 50.00 Lump Sum Rollover 1 AT 15.00 15.00 BENEFIT PAYMENT: OTHER FEES Pensioners Added 2 AT 0.50 1.00 State Tax Filing 6 AT 25.00 150.00 ** SUBTOTAL FEES ** 713.50 OUT OF POCKET CHARGES POSTAGE Lump Sum Rollover 0.54 10 -2012 Tax Form 1099R Postage 5.30 101 -2012 Tax Form 1099R Postage 53.53 58.83 Advice of Deposit 208.44 Benefit Payment 6.48 Lump Sum 2.70 UPS DELIVERY UPS Charges 03/27/2013 11.51 UPS Charges 04/26/2013 6.73 UPS Charges 05/31/2013 6.61 24.85 ** SUBTOTAL OUT OF POCKET ** 301.84 CURRENT CHARGES USD 1,015.34 INV.# 1306074706 -9997 9BYM- Police Officer Retirement Trust 2013/07/25 2012 Compensation Disclosure Report DDA Interest Estimate 2012 Barbara L. Ladue City of Boynton Beach Boynton Police & Fire Pension Fnds, 1500 Gateway Blvd,Suite #220 Pension Administrator Boynton Beach, FL 33426 Dear Customer, Following is the annual estimated 2012 benefit payment float income for your plan(s). If you have any questions, please don't hesitate to contact your State Street Retiree Services client service manager. Sincerely, State Street Retiree Services Client Invoice Payment Type Interest Earned 9BYM LUMP SUM $1.01 9BYM PENSION $5.15 Total 2012 Estimated DDA $6.16 * This report discloses variable compensation paid directly or indirectly to State Street Bank and Trust Company (or its affiliates) in connection with recordkeeping, benefit payment or other services provided to your plan(s). The amounts indicated may be based upon average balances, allocated shares and /or a reasonable estimate of the revenue generated by your plan(s). To the extent State Street Affiliates perform services for your plan(s), such affiliates may share revenue received with State Street Bank and Trust Company or may credit State Street for such revenue against amounts due from State Street to such affiliate. Personal Sensitive Data 12B1 /Float Disclosure Unless you have negotiated a higher per check charge in exchange for your plan's retention of float, Russell's paying agent, State Street Bank will receive float income on uninvested cash as part of its compensation for services provided to the Plan. The amounts generally earn the rates available on money market instruments. Circumstances where float income will be received on uninvested cash include: Russell's paying agent, State Street Bank will receive float income with respect to the processing of withdrawals, distributions and loans. Float is received from the time a withdrawal, distribution or loan check is processed until the check is cashed, or, with respect to uncashed checks, the date the underlying amounts are returned to the Trust. Checks are typically mailed a few days before funds are debited from the trust account, which is typically the business day following the date the transaction was effected in the participant's account. To limit the period of float on uncashed checks, at least once a year, uncashed checks are cancelled and the underlying amounts are returned to your trust. Additional background regarding check processing is available upon request, and is also contained with the business process flows accompanying the administrative services agreement. Deviations from these timelines are possible in Tight of administrative impracticability. Additional information is available to you upon request. X0185 rev 03/08 THE LAW OFFICES OF PERRY & JENSEN, LLC ANN H. PERRY BONNI SPATARA JENSEN apeny ©perryjensenlaw.com bsjensen©perryjensenlaw.com July 23, 2013 Via Email Boynton Beach Police Officers' Pension Fund Toby Athol 1500 Gateway Blvd., Suite 220 Boynton Beach, FL 33426 Re: Legal Services Provided Invoice #71861 Dear Toby: Enclosed please find the Firm's invoice for services rendered for the period that ended 7/15/2013. Your current balance due is $2,382.95. 1 re it ., If you have any questions, please do not hesitate to contact me. 441 Sincerely yours, i 0 / r460. iF Bonni S. Jensen BSJ /Ig Enclosure Copy to: Barbara LaDue Via Email Only 400 EXECUTIVE CENTER DRIVE, SUITE 207.:. WEST PALM BEACH, FLORIDA 33401 -2922 PH: 561.686.6550 •:. Fx: 561.686.2802 THE LAW OFFICES OF PERRY & JENSEN, LLC 400 Executive Center Drive Suite 207 West Palm Beach, FL 33401 -2922 Invoice submitted to: Boynton Beach Police Officers' Pension Fund Attn: Chairman 1500 Gateway Blvd., Suite 220 Boynton Beach, FL 33426 Copy to: Barbara LaDue - Via Email July 23, 2013 In Reference To: FOR PROFESSIONAL SERVICES RENDERED AS FOLLOWS: Client / File No.: 0188 Invoice #71861 Professional Services Hrs /Rate Amount Trustee Election Trustee Election 6/17/2013 BSJ Telephone call with Toby Athol re: Election Runoff 0.25 50.00 Trustee Election 200.00 /hr SUBTOTAL: [ 0.25 50.00] For professional services rendered 0.25 $50.00 Additional Charges : Bill File 7/15/2013 Copy Charges 12.60 SUBTOTAL: [ 12.60] Total-additional- charges $1-2-.60 For professional services rendered 0.25 $62.60 Total amount of this bill $62.60 Boynton Beach Police Officers' Pension Fund Page 2 Previous balance Amount $2,320.35 Balance due $2,382.95 THE LAW OFFICES OF PERRY & JENSEN LLC ANN H. PERRY BONNI SPATARA JENSEN aperry©perryjensenlaw.com bsjensen©perryjensenlaw.com June 21, 2013 Via Email Boynton Beach Police Officers' Pension Fund Toby Athol 1500 Gateway Blvd., Suite 220 Boynton Beach, FL 33426 Re: Legal Services Provided Invoice #71792 Dear Toby: Enclosed please find the Firm's invoice for services rendered for the period that ended 6/15/2013. Your current balance due is $2,320.35. If you have any questions, please do not hesitate to contact me. Sincerely yours, n 1 Bonni S. Jensen (J BSJ/Ig Enclosure Copy to: Barbara LaDue Via Email Only 400 EXECUTIVE CENTER DRIVE, SUITE 2074. WEST PALM BEACH, FLORIDA 33401 -2922 PH: 561.686.6550 ❖ Fx: 561.686.2802 THE LAW OFFICES OF PERRY & JENSEN, LLC 400 Executive Center Drive Suite 207 West Palm Beach, FL 33401 -2922 Invoice submitted to: Boynton Beach Police Officers' Pension Fund Attn: Chairman 1500 Gateway Blvd., Suite 220 Boynton Beach, FL 33426 Copy to: Barbara LaDue - Via Email June 21, 2013 In Reference To: FOR PROFESSIONAL SERVICES RENDERED AS FOLLOWS: Client / File No.: 0188 Invoice #71792 Professional Services Hrs /Rate Amount Miscellaneous Matters Miscellaneous Matters 5/26/2013 BSJ E -mail to Toby Athol re: Prequin Public Records Request 0.25 50.00 Miscellaneous Matters 200.00 /hr Miscellaneous Matters 6/7/2013 LG E -mail to Trustees and Administrator re: Memorandum on the Important 0.10 7.50 Pension Disclosure Amendments to Chapter 112 (Senate Bill 534) 75.00 /hr Miscellaneous Matters Miscellaneous Matters BSJ Draft Memorandum re: Senate Bill 534 0.25 50.00 Miscellaneous Matters 200.00 /hr SUBTOTAL: [ 0.60 107.50] Participant - Epstein Participant - Epstein 5/22/2013 LG Forward an email from Paul Kelley to the Trustees & Administrator per 0.10 7.50 Bonni's request 75.00 /hr Participant - Epstein Boynton Beach Police Officers' Pension Fund Page 2 Hrs /Rate Amount Participant - Epstein 5/22/2013 BSJ Telephone call with Paul Kelley 1.00 200.00 Review email from Paul Kelley 200.00 /hr Review email from Robert Epstein E -mail to Paul Kelley re: Mr. Epstein email Review Paul Kelley response re: Epstein Memorandum Participant - Epstein Participant - Epstein 6/5/2013 BSJ Telephone call with Jason Llopis re: Disability Process 0.25 50.00 Participant - Epstein 200.00 /hr SUBTOTAL: [ 1.35 257.50] Plan Document Plan Document 5/31/2013 BSJ Draft Amendment 2.00 400.00 E -mail to Toby Athol 200.00 /hr Telephone call with Toby Athol E -mail to Julie Oldbury E -mail to Pete Strong Plan Document SUBTOTAL: [ 2.00 400.00] Trustee Information Trustee Information 5/17/2013 BSJ Review & Respond to email from Toby Athol 0.50 100.00 Research Plan Document 200.00 /hr Trustee Information Trustee Information 6/6/2013 LG E -Mail to Barbara LaDue re: Confirm John Huntington's email address 0.10 7.50 Trustee Information 75.00 /hr - — — - -T +stee- ffermatia ,— - - 6/10/2013 LG Review email from Barbara LaDue re: John Huntington's new email 0.10 7.50 address 75.00 /hr Update our Records Trustee Information Boynton Beach Police Officers' Pension Fund Page 3 Hrs /Rate Amount SUBTOTAL: [ 0.70 115.00] For professional services rendered 4.65 $880.00 For professional services rendered 4.65 $880.00 Previous balance $1,440.35 Balance due $2,320.35 THE LAW OFFICES OF PERRY & JENSEN LLC ANN H. PERRY SONNI SPATARA JENSEN apeny@penyjensenlaw.com bsjensen@perryjensenlaw.com May 28, 2013 Via Email Boynton Beach Police Officers' Pension Fund Toby Athol 1500 Gateway Blvd., Suite 220 Boynton Beach, FL 33426 Re: Legal Services Provided Invoice #71751 Dear Toby: Enclosed please find the Firm's invoice for services rendered for the period that ended 5/15/2013. Thank you for your payment of $4,096.20. Your current balance due is $1,440.35. If you have any questions, please do not hesitate to contact me. Sincerely yours, ,; Bonni S. Jensen Signed in Ms. Jensen's absence to expedite delivery BSJIIg Enclosure Copy to: Barbara LaDue Via Email Only 400 EXECUTIVE CENTER DRIVE, SUITE 207.:. WEST PALM BEACH, FLORIDA 33401 -2922 PH: 561.686.6550 Fx: 561.686.2802 lattf THE LAW OFFICES OF PERRY & JENSEN, LLC 400 Executive Center Drive Suite 207 West Palm Beach, FL 33401 -2922 Invoice submitted to: Boynton Beach Police Officers' Pension Fund Attn: Chairman 1500 Gateway Blvd., Suite 220 Boynton Beach, FL 33426 Copy to: Barbara LaDue - Via Email May 28, 2013 In Reference To: FOR PROFESSIONAL SERVICES RENDERED AS FOLLOWS: Client / File No.: 0188 Invoice #71751 Professional Services Hrs/Rate Amount Attendance at Trustee Meetings Attendance at Trustee Meetings 5/14/2013 LG Review Post Meeting Folder 0.30 22.50 Attendance at Trustee Meetings 75.00/hr Attendance at Trustee Meetings BSJ Attend Meeting 2.00 400.00 Attendance at Trustee Meetings 200.00/hr SUBTOTAL: [ 2.30 422.50] Meeting Notices and Agendas Meeting Notices and Agendas 5/8/2013 PH Prepare Attorney Report, Handouts, and Notebook for upcoming 1.50 112.50 Meeting - 5/14/13 75.00/hr Meeting Notices and Agendas SUBTOTAL: [ 1.50 112.50] Boynton Beach Police Officers' Pension Fund Page 2 Hrs/Rate Amount Miscellaneous Matters Miscellaneous Matters 4/16/2013 BSJ Review and revise Memorandum re: SB458 0.25 50.00 Miscellaneous Matters 200.00/hr Miscellaneous Matters 4/17/2013 BSJ Review & Respond to email from Toby Athol 0.50 100.00 Review and revise Language to Reference Pension Plan in Collective 200.00 /hr Bargaining Agreement Miscellaneous Matters Miscellaneous Matters 4/18/2013 LG E -Mail to Board of Trustees & Administrator re: Memorandum with 0.10 7.50 updated SB458 Language 75.00 /hr Miscellaneous Matters Miscellaneous Matters 5/16/2013 BSJ Review Prequin Public Records Request 0.50 100.00 E -mail to Burgess Chambers 200.00/hr Review & Respond to Responses from Burgess Chambers Miscellaneous Matters SUBTOTAL: [ 1.35 257.50] Participant - Epstein Participant - Epstein 4/16/2013 PH Organize Robert Epstein Disability Folder & Put into Binder 0.30 22.50 Participant - Epstein 75.00 /hr Participant - Epstein BSJ Review Hearing Review Procedures 0.25 50.00 Participant - Epstein 200.00 /hr Participant - Epstein 4/17/2013 BSJ Review email from Barbara LaDue re: DefinitionsotMember x.75 150.00 Telephone call with Barbara LaDue 200.00 /hr Telephone call with Toby Athol Participant - Epstein Boynton Beach Police Officers' Pension Fund Page 3 Hrs /Rate Amount Participant - Epstein 4/25/2013 BSJ Telephone call with Toby Athol 0.25 50.00 Participant - Epstein 200.00 /hr Participant - Epstein 5/14/2013 BSJ E -mail to Paul Kelley re: Attendance at Meeting 0.10 20.00 Participant - Epstein 200.00/hr Participant - Epstein 5/15/2013 BSJ Review & Respond to email from Paul Kelley's Office 0.75 150.00 E -mail to Barbara LaDue 200.00/hr E -mail to Teri Norris E -mail to Trustees Participant - Epstein SUBTOTAL: [ 2,40 442.50] State State 4/16/2013 BSJ Telephone call with Trish Shoemaker re: Supplemental Plan Provision in 0.25 50.00 SB458 200.00/h r State SUBTOTAL. [ 0.25 50.00] Trustee Form 1 Trustee Form 1 5/13/2013 BSJ Draft Memorandum to Trustees 0.15 30.00 Trustee Form 1 200.00/hr Trustee Form 1 LG E -Mail to Trustees and Administrator re: Memorandum on Form 1 Filing 0.20 15.00 Trustee Form 1 75.00 /hr Trustee Form 1 5/14/2013 BSJ Review email re: 2012 vs. 2013 Form 1 0.25 50.00 Research Forms 200.00/hr Trustee Form 1 Boynton Beach Police Officers' Pension Fund Page 4 Hrs/Rate Amount SUBTOTAL: [ 0.60 95.00] Trustee Information Trustee Information 4/16/2013 BSJ Telephone call with Toby Athol 0.25 50.00 Trustee Information 200.00 /hr SUBTOTAL: [ 0.25 50.00] For professional services rendered 8.65 $1 ,430.00 Additional Charges : Bill File 5/15/2013 Copy Charges 10.35 SUBTOTAL: [ 10.35] Total additional charges $10.35 For professional services rendered 8.65 $1,440.35 Total amount of this bill $1,440.35 Previous balance $4,096.20 Accounts receivable transactions 5/28/2013 Payment - Thank Youl. Check No. 053358 ($4,096.20) Total payments and adjustments ($4,096.20) Balance due $1,440.35 BURGESS CHAMBERS & ASSOCIATES, INC. Invoice INVESTMENT ADVISORS S.E.C. REGISTERED 315 E. Robinson Street, Suite 690 Date Invoice # Orlando, Florida 32801 6/4/2013 13 -144 BdI To Boynton Beach Police Officers' Pension Barbara La Due, Administrator 1500 Gateway Blvd, Suite 220 Boynton Beach, Florida 33426 Description Amount Second Quarter 2013 Investment and Performance Monitoring and Advisory Fee per Contract 5,000.00 • .,,li,L� at. 11 t //� ,,.� „tui ..1.A./111/118411891d , gn , ahr - n= ,'L•11a ?JL'lti!!1!!�!' - - —Total -- - -- $5,000.00 Phone # Fax # (407) 644-0111 (407) 644-0694 GRS Gabriel Roeder Smith & Company Consultants & Actuanes One East Broward Blvd. Suite 505 Invoice Ft. Lauderdale, Honda 33301 -1872 (954) 527-1616 Date Invoice 7/3/2013 402301 Bill To: Please Remit To: Attention: Ms. Barbara La Due Dept. # 78009 City of Boynton Beach Gabriel Roeder Smith & Company Boynton Beach Municipal Police Officers Retirement Fund PO Box 78000 Renaissance Executive Suites Detroit, Michigan 48278 -0009 1500 Gateway Blvd., Suite 220 Boynton Beach, Florida 33426 Federal Tax ID 38- 1691268 Client 100550, Pension Valuation Work, Project 100550 -052 Amount For services rendered for the Boynton Beach Municipal Police Officers Retirement Fund through 6/30/2013 Retirement Benefit Calculations for: Camel, Harvey 2.00 225.00 450.00 Service purchase calculation for Ronald Davis 450.00 Amount Due $900.00 PLEASE INDICATE THE INVOICE NUMBER ON YOUR REMITTANCE. THANK YOU. Page 1 of 1 Barbara Ladue From: Bonni S. Jensen [bsjensen @perryjensenlaw.com] Sent: Tuesday, August 06, 2013 5:03 PM To: AtholT @bbfl.us; 'Caudell, Scott'; 'Llopis, Jason'; john007z3 @hotmail.com; degiulioj @bbfl.us Cc: Barbara Ladue; Paul Kelley; THEPENSIONTEAM @PERRYJENSENLAW.COM Subject: Boynton Beach Municipal Police Officers Pension Trust Fund - Epstein Attachments: Disability Application.pdf; HIPPA Form.pdf; 2012 -11 -3 Robert Epstein Termination Records.PDF; Email to Trustees 11.29.12.pdf; Sec 18 -168 and 169(c)(1).pdf; Granger.PDF; Raines decision (00019901).PDF; Thompson Petition for Writ.pdf; Thompson Reply.pdf; Martinez Petition for Writ.pdf; Martinez REply to REsponse.pdf; Martinez Response.pdf; Martinez Order.pdf Trustees, Attached to this email are the following documents: 1. Application of Robert Epstein (redacted) 2. HIPAA Release 3. Documentation of date of termination (redacted) 4. Pertinent Plan provisions with cover email 5. Cases provided by Board attorney: a. Granger b. Raines 6. Cases provided by Mr. Epstein's Attorney Paul Kelley a. Thompson (two documents) b. Martinez (three documents) 7. Subsequent Order on Martinez Case from Board attorney Please review in advance of the August 13, 2013 meeting when we will discuss it. To make sure that your email is handled in a timely manner, please copy thepensionteam( perrylensenlaw corn Bonni S. Jensen The Law Offices of Perry & Jensen 400 Executive Center Drive, #207 West Palm Beach, Florida 33401 Telephone: 561 - 686 -6550 Fax: 561 - 686 -2802 bsjensen(perrylensenlaw cam CONFIDENTIALITY NOTICE: This communication is confidential, may be privileged and is meant only for the intended recipient. If you are not the intended recipient, please notify the sender ASAP and delete this message from your system. IRS CIRCULAR 230 NOTICE: To the extent that this message or any attachment concerns tax matters, it is not intended to be used and cannot be used by a taxpayer for the purpose of avoiding penalties that may be imposed by law. 1 AUTHORIZED SIGNATURES V V NAME OF PLAN/PROGRAM: BOYNTON BEACH MUNICIPAL POLICE OFFICERS' PENSION PLAN NAME AND TITLE OF SIGNER SPECIMEN SIGNATURE OF SIGNER *CIRCLE ALL THAT APPLY Please Rule out Spaces Not Used CI NAME: 7 n y XT Cl&BD BD TITLE: (� IM i �/ [kg-57-88 SIGNATURE LEGAL Cr) J /f5' LL,//l(� D� P(.S BD TITLE. St �.IQtTA /Q y/ STG LEG /74'067 LEGAL CI NAME' ASCU / ! exit! D L L_ BD TITLE' % /C tt s CI &BD SIGNATURE LEGA CI NAME' Zr& D fs 16L l a BD TITLE: f k. 0-5 7 "� SIGNATURE LEGA LEGA * CI = Cash Instructions BD = Benefit Disbursing CI &BD = Both LEGAL = Legal The (insert number) signatures written above are the signatures of the persons holding the offices indicated. These persons are authorized to give instructions to Russell Investments regarding cash flow and trading activity, benefit disbursing activity or are authorized to sign legal documentation. Norg Any one of the signatures on the Authorized Signatures Iist is required for deposits by wire or check. Any two signatures from this Iist are required for withdrawals and any other transactions. By. Date: Title Russell Authorization: Authorized Signature Form - additional doc Revised 9/12/08 (/ C'� o< AUTHORIZED SIGNATURES i/ NAME OF PLAN /PROGRAM: BOYNTON BEACH MUNICIPAL POLICE OFFICERS' PENSION PLAN NAME AND TITLE OF SIGNER SPECIMEN SIGNATURE OF SIGNER *CIRCLE ALL THAT APPLY Please Rule out Spaces Not Used CI NAME: .. 1 Y / // Dft) CI BD TITLE: ,�,i,�,S T_ SIGNATURE LEGAL � 4a4R4 /11 k� CI NAME: nn /4J CI &BD TITLE: r N$f � A) flrnrll vtJ /S TRH- / ale. SIGNATURE LEGAL CI NAME: BD CI &BD TITLE: SIGNATURE LEGAL CI NAME: BD TITLE: Cl &BD SIGNATURE LEGAL * CI = Cash Instructions BD = Benefit Disbursing CI &BD = Both LEGAL = Legal The 02 (insert number) signatures written above are the signatures of the persons holding the offices indicated. These persons are authorized to give instructions to Russell Investments regarding cash flow and trading activity, benefit disbursing activity or are authorized to sign legal documentation. rt Any one of the signatures on the Authorized Signatures list is required for deposits by wire or check. Any two signatures from this list are required for withdrawals and any other transactions. By: Date: Title: Russell Authonzation Authorized Signature Form - additional doc Revised 9/12/08 AMENDMENT NO. 12 TO INVESTMENT MANAGEMENT AGREEMENT This Amendment No. 12 is made as of May 15, 2013, between The Board of Trustees of the City of Boynton Beach Municipal Police Officers' Retirement Trust Funds ( "Named Fiduciary") and Russell Trust Company ( "Investment Manager"). WITNESSETH: WHEREAS, the Named Fiduciary and Investment Manager have entered into an Investment Management Agreement for the Municipal Police Officers' Retirement Funds dated June 6, 2002 (the "Agreement"); and WHEREAS, Article Eighth of the Agreement provides that it may be amended by the parties pursuant to a written instrument; NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained, the Named Fiduciary and the Investment Manager do hereby amend the Agreement as follows: Exhibit B is amended to read as attached hereto as of the effective date. IN WITNESS WHEREOF, this Amendment No.12 has been fully executed as of the day and year first above written BOARD OF TRUSTEES OF THE CITY OF BOYNTON BEACH MUNICIPAL POLICE OFFICERS' RETIREMENT TRUST FUNDS, ATTEST. Named Fiduciary, as aforesaid By: Title: ATTEST: RUSSELL TRUST MPANY Ldttdr- V— i .1�. • By: Title: p• p S uvi c c iR'Et�µ., ti �i �` 4 EXHIBIT B TO INVESTMENT MANAGEMENT AGREEMENT Fee Schedule Boynton Beach Police Retirement Fund As required by the Agreement, a schedule outlining fees for services provided by Russell Trust Company is provided below. The net asset values of the Commingled Funds are expressed exclusive of fees, except for the Russell Real Estate Equity Fund (see below). Fees are invoiced quarterly based on the average daily market value of assets held during the period using one -fourth of the annual rates Total assets invested in $15 M - $25 M - $35 M - $75+ M Target Allocation actively- managed Russell funds $25 M $35 M $75 M Limits Fund Annual Fee ( %) Minimum Maximum Russell Multi -Asset Core Fund 0.85% 0.82% 0 80% 0.79% 60% 70% Russell Large Cap Defensive Equity Fund 0.85% 0.82% 0.80% 0 79% Russell Fixed Income I Fund 0.85% 0.82% 0.80% 0.79% Russell Mufti- Manager Bond Fund 0.85% 0.82% 0.80% 0.79% 25% 40% Russell Target Duration LDI Funds 0 85% 0.82% 0.80% 0.79% Russell Long Duration Fixed Income Fund 0.85% 0 82% 0 80% 0 79% Russell Inflation - Protected Securities Fund * 0.85% 0.82% 0 80% 0.79% 0% 5% Russell Short-Term Investment Fund * 0.85% 0.82% 0 80% 0.79% 0% 5 °!0 Russell Real Estate Equity Fund 0 85% 0.82% 0.80% 0.79% _ I 2% 5% * For purposes of determining the applicable fee breakpoint, assets actively- managed by Russell will exclude assets invested in these funds. Should the aggregate average daily market value for any quarter fall below $15 million for actively- managed Russell funds, fees will be subject to re- negotiation. The Russell Real Estate Equity Fund is an internal fee fund, with a standard fee of 1.50 percent The difference between the standard 1.50 percent and the City of Boynton Beach Police Retirement Fund negotiated rate will be credited to your quarterly invoice Unless otherwise prohibited by law or regulation, the fees shown above generally include services related to conferences and seminars that the Investment Manager may hold at its discretion from time to time for its clients and prospects. An asset aggregation methodology may be used to determine fees for some or all assets governed by this Fee Agreement. In no event does the asset aggregation result in a rebate or benefit to Russell. If asset aggregation is used, the fees for each asset pool(s) have been reviewed to determine that there is a neutral or positive fee impact to at least one Investor asset pool, but in no event is there a detrimental fee impact to any asset pool. If any asset pool is held for the benefit of participants or beneficiaries, the Investor should make its own determination as to whether it should disclose this aspect of the Fee Agreement to those parties. Benefit Payment & Retiree Services Fees Check Processing Per Payment Issued on a Recurring Basis (Check or ACH) $1.25 Per Check for Lump -Sum Benefit Payments $10.00 Per Check for Lump -Sum Trustee to Trustee Transfers & Rollovers $15.00 Pass Through Charges: Postage & Handling (e.g. Recurring Check, ACH Advice, Lump -Sum Payment) At Cost Annual W4 -P TEFRA Solicitation $.50 per item W4 -P TEFRA Solicitation Per New Adds to Pension Roll $.50 per item Express Mailings At Cost Federal Wire Transfers (Domestic) $25.00 Federal Wire Transfers (International) $50.00 Refund Requests for Tax Withheld Correctly (per instructions) $15.00 Telephone Charges for Toll Free Numbers At Cost Hardware /Usage Charge Per Minute Based on Current Tariffs At Cost State Tax Reporting State Tax Filing Per State /Per Month /Per Plan $25.00 State Tax Reconciliation, Including Recurring and Annual Filings Included Payment Conversion and Implementation * Per Retiree, Conversion $1.00 Per Retiree, Each Parallel Run $0.75 Minimum Fee, Per Conversion $1,000.00 *This fee would be applicable for clients with over 1,500 benefit payments per month. Optional Benefit Payment and Retiree Services Retiree Service Center Per Retiree, Per Year ** $8.00 Per new pensioner added $0.50 Additional Charges for Toll Free Transmission Line Costs At Cost * *Does not include additional cost for toll free number transmission line pass through charges. Retiree On -line Website — Mypenpay.com Per Retiree, Per year (minimum fee of $2,500) $5.00 Per Retiree, One -Time Conversion fee (minimum fee of $2,500) $2.00 Additional pass through Charges for Announcement Letter & Mailing At Cost Query Plus — Plan Sponsor Has the Ability to Request Queries of Their Information from the PLUS System Query Development (Flat Fee) $30.00 Per Hour Charge $30.00 Extract Development (Flat Fee) $100.00 Per Hour Charge $30.00 For each subsequent extract $50.00 Query Labels (Flat Fee) $35.00 Per Hour Charge $30.00 Per Label Charge $0.05 Custom Programming Ad Hoc Request, Per Hour $100.00 Customized Letter Generation New Set Up Programming, Per Hour $100.00 Mass Mailing, Per Retiree $0.50 Individual Letters, Per Letter $1.50 File Maintenance (terminated vested, etc.) Per Participant, Per Month $0.05 Beneficiary Monitoring Included Special Projects Request, Per Hour $30.00 Premium Billing Operational Costs (Monthly Fee) $1,000.00 Per monthly invoice $3.00 Per quarterly invoice $5.00 Per semi - annual invoice $8.00 Per annual invoice $10.00 Per new add $5.00 Premium Billing Conversion Costs Minimum conversion fee (Premium Billing) $200.00 Per participant, per conversion $6.00 Per participant, per parallel $3.00 Premium remittance to carriersNEBAs No Charge iPayBenefits.com Direct access to participant information and check ledgers No Charge Robust reporting functionality No Charge Remote management of participant data changes and adds No Charge Continued data entry processing with no downtime No Charge Provides ability to complete stop /reissues No Charge In addition to the fees itemized in the fee schedules above, should an overdraft occur, overdraft fees will be calculated based on the amount of the overdraft and the prevailing fed funds rate. All daily overdraft fees in excess of $100 will be invoiced In accordance with previous instructions, fees will continue to be invoiced for payment unless otherwise instructed. , P I D f 2 I , t' . `,li AU1HQRIZED SIGNATURES ,,, 1 ' f p NAME o!: PLAN/PROGRAM Boyarott BacH MUNICIPAL POLUCE OFFICERS' PENSION PLAN Cz NAME AND TIRE OF SIGNER Snails./ SIGNATURE * CIRCLE SIGNER *CIRCLE ALL NAT APPLY Please Ruts CIO Spaces Not used Al d NAME: GFRYCHAMIAN / CI Trite: CHAIRMAN /TRUSTEE if f SIGNATURE LEG NAME TOBY ATHOL, II E. CUM TORE: SECRETARY /TRUSTEE SIGNATURE tVAME Scan t;1►uDELt 6 . t l CIbF1l, Tlrt.e: TRusree SIGNATURE - . LEGA NAME: JASON Lt.opts P TITLE: TRUSZEE i LE GA SIGNATURE LEGA 1 CI Nom FRANK BD TIRE: TRUSTEE L Edd�D SI TURr: • LEG • • CI a Cash Instructions BD = Benefit Disbursing CI&aD= Both LEGAL= Legal The 5 (insert number) signatures writes above are the signatures of the persons holding the oMces indicated. These persons am authorized to give Instructions to Rased Investments regarding cash tow and Irving activity, benefit disbursing activity or are authorized to sign legal documentation. Two • ,,..t u1k_11t1.1'i 11i1 B , i - iu:i. � _ By: C .,r (AVM / � •" ' jl ' Date: t ' " 01 O Titie : (' q $ Al An / .,./ Russell Authorization: "? 410/0 • Ill rho I ATS amoRIDA *t • t3t1lct Authorised s�nmueo Farm- w beo �e+►asl aloe MAC) a ' MUM Revise&9/I2/d8 See Note Below P OP 2, ADDITIONAL LIST AuTHeRIzED SIGNATURES NAME OP PLAN/PROGRAM: BOYNTON /MAO( MuN1dPAt. POLICE OFFICERS' PENNON PLAN NAME AND 'Ritz OF SIGNER SPECIMEN SIGNATURE of SIGNER "CIR ALL E L THAT APPLY Please Rule out Spaces Not Used CI NAME: AR& / Z# L D k� D 'Tram rafivsmit, minftv,is7`.Piitok' SIGNATURE LEGAL CI NAME .r � BD CI&BD TITLE: SIGNATURE LEGAL Cl NArdE lSD ayO Tme - sIGNATt1kE LEGAL CI NAME ��'"~ D Ci6D TITLE: -'� SIGNATURE LEGAL CI = Cash Instructions BD = Benefit Disbursing Cl &8D = Both LEGAL = Legal The • ( , (Insert number) signatures written above are the signatures of the persons holding the Offices indicated. These persons are authorized to give Insirudtons to RusseN investments regarding cash Now and trading activity, benefit disbursing activity or are authorized to sign Legal documentation. alir yr • Date: 0 l Russell Authorization: 6 / / t7 Tint Any one of the signatures on the Authonzed Signatures list and the Additional Authorized Signature Iist �Q 1 E required for deposits by wire or check. Any two signatures from these lists required for withdrawals and any other transactions. moo/had &swum Form -auldiiwniidon Raiu&W12108 ZDO /ZDO'd ZZBai! 64•£1. D112/81150 :woaj